Comptroller and Auditor General of India has recommended to close down 10 non-functional state-owned public sector undertakings (PSUs) as they do not serve any purpose. In its report tabled today in the state Assembly, the CAG said, “The process of voluntary winding up of the Companies Act is much faster and needs to be adopted/pursued vigorously. The government may make a decision regarding winding up of five non-functional PSUs where no decision about their continuation or otherwise has been taken after they became non-functional. The government may consider setting up a cell to expedite closing down such companies.”
It has also said that the working PSUs earned a profit during 2004-07 but later they started incurring losses, which have reached Rs 3,120.13 crore in 2008-09. “During the year 2008-09,out of 40 working PSUs, 26 earned a profit of Rs 113.70 crore while 10 PSUs incurred losses to the tune of Rs 3,233 .83 crore. The remaining four companies did not provide first accounts.
The CAG report has revealed that power transmission and distribution companies have incurred losses. Among them, Madhya Pradesh Poorva Kshetra Vidyut Vitaran Company Limited incurred a loss of Rs 1,706.92 crore, MP Paschim Kshetra Vidyut Vitaran Company Limited Rs 674.44 crore, MP Madhya Kshetra Vidyut Vitran Company Limited Rs 494.22 crore and MP Power Generating Company Limited lost Rs 335.66 crore.
“The losses of the PSUs are mainly attributable to deficiencies in financial management, planning, implementation of projects, running their operations and monitoring,” the report said. The report also revealed that the debt-turnover ratio has deteriorated from 0.81:1 in 2003-04 to 1.94:1 in 2005-06 as debt increased from Rs 4,452.15 crore (2003-04) to Rs 14,337.67 crore (2005-06), thereafter it shows declining trend from 1.05:1 (2006-07) to 0.45:1 (2008-09) due to decrease in debt from Rs 14,989.72 crore (2006-07) to Rs 9,309 crore (2008-09) during the same period.
If losses attributed to financial mis-management then why CAG has not recommended action of recovery from CFO or CEO of those PSU?