Srinagar: The net worth of 11 Public Sector Undertakings (PSUs) in J&K has been completely eroded by accumulated losses, a report by the Comptroller and Auditor General (CAG) of India has said.
The liabilities of these state-owned enterprises have far exceeded the value of their total assets. They have gone into red despite budgetary support worth crores of rupees.
The national auditor of India further revealed that on March 31, 2021, the state turned union territory had 42 PSUs. The accumulated losses of 18 of its PSUs have touched Rs 3,655.92 crore.
The J&K government by the end of previous fiscal made Investments in its 42 PSUs in the form of equity and long-term loans worth Rs 18,332.90 crores. It has consistently been providing financial support to these PSUs in various forms through the annual budget as equity, loans, grants, subsidies, writing off their loans and even converting their loans into equity.
The CAG disclosed “the net worth of 11 out of 18 PSUs had been completely eroded by accumulated loss and their net worth was negative. The net worth of these 11 PSUs was in minus at Rs 3,148.02 crore”.
These PSUs had an equity investment and capital worth hundreds of crores of rupees.
Jammu and Kashmir Road Transport Corporation (JKRTC) according to the report tops the list of corporations with a negative net worth of minus Rs 1,426.98 crores. It is followed by Jammu and Kashmir Industries Limited with a net worth of minus Rs-737.19 crores.
The Jammu and Kashmir Minerals Limited has slipped to the third position in erosion of its net worth at a negative worth of minus Rs 217.01 crores. This is followed by the J&K Handicrafts (Sales and Export) Development Corporation at minus Rs 161.54 crores and State Industrial Development Corporation at minus Rs 129.34 crores.
PSU’s were established in the post-1947 era to carry out commercial activities for the welfare of the people and contribute to the State Domestic Product of the erstwhile state.
Mismanagement and corruption are attributed as primary reasons for these state-owned utilities going in to red.
The CAG said there are six inactive PSUs in J&K (including four under liquidation) having investment of Rs 57.57 crore towards capital and long-term loans of Rs 0.83 crore This is a critical area as the investments in inactive PSUs do not contribute to the economic growth of the J&K.
The report revealed that the ratio of turnover of the PSUs to the Gross State Domestic Product (GSDP) has steadily been decreasing over the years. Proportion of proceeds to GSDP in 2018-19 was 6.34 percent but it went down to 6.01 in the preceding fiscal.
Details of Investment made in 42 PSUs in the form of equity and long term loans up to 31st of March 2021 revealed that the state government pumped in Rs 18,332.90 crore.
However, the Union Territory has still 12 PSUs that reported a profit of Rs 480 in their financial statements finalized during 2020-21. J&K Bank was the lead net profit maker with Rs 428.45 crores, followed by J&K Horticulture Produce Marketing and Processing Corporation Limited with a profit of Rs 31.47 crores, and Power Development Corporation at Rs 20.42 crore.
