PSUs In This State Can Be Shutdown Over Rs 20,000 Crore Loss; No Revival?

By Malvika Gurung Last updated Sep 12, 2020

CAG Instructs Maharashtra Govt to revive or shut down about 28 PSUs in state registering losses of tune Rs 20,214 crore.

With the privatisation drive going on around the country, not just central but different state governments too, are trying to revive or pay off the incredible debt baggage of their respective public sector undertakings (PSUs).

In a similar feat, a report submitted by the Comptroller and Auditor General (CAG) of India has brought urgent action to be submitted by the Maharashtra Government.

Let’s have a look at the contents of this report.

MH PSUs Registering Losses of Rs 20,214 Crore

The report submitted by CAG of India has instructed the MH government to seek an urgent closure of all such PSUs, which are registering losses, on Tuesday.

The CAG has calculated these losses to be Rs 20,214 crore.

The report stated,

“The state government should review the working of statutory corporations, rural banks, joint stock companies, cooperatives, and departmental cooperative undertaking incurring losses and take appropriate steps for closure or revival.”

Of the 95 total PSUs in the state, 28 are incurring losses, with the net incurring loss to

Numbers

The auditor (CAG) has reported that the Maharashtra govt invested a total of Rs 1.53 lakh crore in its PSUs, at an average interest of 7.9% on its borrowings between 2014-19.

Of this, only 0.07% was recorded as the average return of the investment in the mentioned period.

Speaking of loss making PSUs, the state govt funded them in the form of equity and long-term loans, for 11 such PSUs, with a total of Rs 10,226 crore.

Of these 11 PSUs, the ones which have been completely eroded are:

Maharashtra Power Corporation Limited: Rs 1,013 crore
Maharashtra State Textile Corporation: Rs 844.09 crore
Maharashtra State Financial Corporation: Rs 625.26 crore

Also, there are 49 departmental commercial undertakings, out of which 29 have been registering losses continuously, while the State has invested Rs 2,990.71 crore in them.

CAG has asked for a review in this.

The auditor has also flagged about 395 irrigation projects, where costs have crossed over Rs 1.06 lakh crore, asking the State government to look into the timely-completion of these projects.