Improve results or shut PSUs: CAG

The Comptroller and Auditor General (CAG) of India has asked the Rajasthan government to either improve the performance of three government companies or consider their "closure".

The CAG, in its audit report for the year ended March 31, 2005, tabled in the assembly recently, said the three government companies "" the Rajasthan State Handloom Development Corporation Ltd, Rajasthan State Agro Industries Corporation Ltd, and Rajasthan Electronics Ltd "" had been incurring losses for the last five years as per their latest finalised accounts, leading to negative net worth.

"The government should either improve their performance or consider their closure," the CAG said.

On March 31, 2005, there were 21 government companies, 16 working and 5 non-working, and three working statutory corporations, compared with 23 government companies and three statutory corporations on March 31, 2004.

The report said the total investment in working public sector undertakings (PSUs) decreased from Rs 14,064.83 crore on March 31, 2004 to Rs 13,805.85 crore on March 31, 2005. The total investment in non-working PSUs also decreased from Rs 12.32 crore to Rs 12.10 crore during the same period.

The report said 12 working government companies and two statutory corporations had finalised their accounts for the year 2004-05.

The accounts of four working companies and one corporation were in arrears for one year. While 10 working PUSs, eight government companies and two statutory corporations earned an aggregate profit of Rs 189.50 crore, four working government companies and one statutory corporation declared a dividend of Rs 21.34 crore and Rs 78.53 lakh respectively.

Against this, four PSUs, three government companies and one statutory corporation incurred an aggregate loss of Rs 41.49 crore. Of these loss incurring working government companies, two companies had accumulated losses of Rs 40.59 crore, which exceeded their paid up capital of Rs 7.22 crore.

One corporation, which earned a profit during 2004-05, had accumulated a loss of Rs 68.83 crore, against its paid up capital of Rs 81.52 crore.

The CAG in its audit report said the turnover of two working government companies, Rajasthan State Jal Vikas Nigam Limited and Rajasthan State Hotels Corporation Limited, which has been in existence for the last 21 and 40 years respectively, had been less than Rs five crore in each of the preceding five years as per their latest accounts.