CAG recommends winding up of UP PSUs
Many PSUs have a negative return on investment; few misreported facts
LUCKNOW : A comptroller and auditor general (CAG) report, tabled on the floor of the state assembly here on Thursday, has shown UP public sector undertakings (PSUs) in bad light, with many of them having a negative return on investment, prompting the auditor to suggest their winding up. Majority of PSUs, it was found, do not maintain their accounts properly to the extent of resorting to misrepresentation of facts, fraud and misappropriation. According to the report, out of the 103 PSUs in UP, 95 had arrears in accounts from 1981-82 onwards.
LUCKNOW: A comptroller and auditor general (CAG) report, tabled on the floor of the state assembly here on Thursday, has shown Uttar Pradesh public sector undertakings (PSUs) in bad light, with many of them having a negative return on investment, prompting the auditor to suggest their winding up.
Majority of PSUs, it was found, do not maintain their accounts properly to the extent of resorting to misrepresentation of facts, fraud and misappropriation. The country’s financial watchdog has refused to give its opinion on the accounts of two of the PSUs, the UP Jal Nigam and the UP Food and Essential Commodities Corporation Ltd, after it found them lacking seriously in financial accountability.
According to the report, out of the 103 PSUs in UP, 95 had arrears in accounts from 1981-82 onwards. And the 22 PSUs (in which the state government has made investments) that had finalized their accounts in the last three years had an average negative return on investment of 19% against average borrowing cost of 6.25 % resulting in total loss to the state exchequer of Rs 11,920.32 crore.“The losses of 56 PSUs, whose accounts have not been finalized, cannot be estimated,” the report observes.
As on March 31, 2017, investment (capital and long-term loans) in 103 PSUs was Rs 2,39,019.94 crore. The thrust of investment in PSUs during the last five years was in power sector where government invested Rs 1,36,393.21 crore.
The report says, with a surprise, that the basis on which the state government extended budgetary support of Rs 56,273.05 crore to 22 working PSUs and Rs 7.03 crore to three non-working PSUs during last three years, despite not having finalised their accounts, is not clear.
“The shortcomings in one corporation (Uttar Pradesh Jal Nigam) are so serious that the CAG has declined to give an opinion on its accounts. The statutory auditor has also declined to give an opinion in view of serious shortcomings in respect of Uttar Pradesh Food and Essential Commodities Corporation Ltd for the year 2008-09,” the report points out. The auditor suggest that since the continued existence of loss-making PSUs constitutes a substantial drain on the public exchequer, the state government may review the functioning of all loss-making PSUs and review the status of 22 non-working PSUs to initiate/expedite the process of their winding up and assess whether employees of non-working PSUs can be sent on reverse deputation to governent departments as done by Rajasthan.