Many PSUs in UP a drain on state exchequer: CAG report
Taking strong exception to the heavy losses being incurred by 21 of 37 PSUs , the CAG has suggested that the state government reviews the performance of all these companies
LUCKNOW Many public sector undertakings (PSUs) in Uttar Pradesh appear to be a drain on the state’s exchequer with power sector companies leading the list of loss-making units while the net worth of 10 PSUs has completely eroded due to the accumulated losses over the years.
Taking strong exception to the heavy losses being incurred by 21 of 37 PSUs (period of study ending March 31, 2022), the comptroller and auditor general (CAG) has suggested that the state government may review the performance of all these companies.
“The state government may review the performance of loss-making PSUs and invest in them cautiously and take measures to improve their performance,” observed the CAG in its report on the financial performance of state PSUs tabled in the state legislative assembly here on Thursday.
Out of 37 PSUs (studied by the CAG), 21 incurred losses of ₹15,856.93 crore while the remaining 16 earned a profit of ₹378.18 crore. The state government’s major loss-making PSUs are the companies of the power sector with the UP Power Corporation Limited incurring heavy losses. As on March 31, 2022, the UPPCL’s losses were ₹8305.27 crore, Dakshinanchal Vidyut Vitaran Nigam Limited ₹2957.52 crore and Madhyanchal Vidyut Vitaran Nigam Limited ₹2042.20 crore.
“The power sector company- mainly the UPPCL - is contributing to heavy losses, and the state government is aware of the issue,” said chief secretary Manoj Kumar Singh.
The state government’s top profit-making PSUs (as on March 31, 2022) include UP State Road Transport Corporation ( ₹142 crore) and UP Awas Evam Vikas Parishad ( ₹105.16 crore).
UP has nearly 114 PSUs - 72 are functional while 42 are non-functional. The CAG studied the performance of 37 PSUs that did not have their accounts in arrears.
The total investment (equity and long-term loans) was ₹2,80,732.97 crore in these PSUs under study. The investment included 58.51% towards equity and 41.49% in long-term loans.
The state government has an investment of ₹1,55,400.63 crore in these PSUs and this includes equity of ₹1,52,384.09 crore and long-term loans of ₹3016.54 crore.
The net worth of the state government’s 10 PSUs was (-) ₹62,779.27 crore against an equity investment of ₹1,37,041.97 crore.
Out of these 37 PSUs, 17 earned profit during 2019-2020 and 2020-2021. The number of profit-making PSUs, however, decreased to 16 in 2021-2022. The profit-making PSUs earned a profit of ₹784.29 crore, ₹17,757.50 crore and ₹378.18 crore in 2019-2020, 2020-2021 and 2021-2022, respectively. The CAG has noted that the profit in 2020-2021 increased extraordinarily due to write back of provision of bad debts amounting to ₹17381.56 crore by UPPCL.
The CAG has also suggested that the respective PSUs should, in a time-bound manner, reconcile the figures of equity, loans and guarantees outstanding as per records of the PSUs and as per the finance accounts of government of Uttar Pradesh.
