Thursday, July 17, 2014

CAG asks Bihar government to close 33 non-working PSUs

IN A significant directive, the Comptroller and Auditor General (CAG) has recommended 33 non-working public sector units (PSUs) in Bihar be closed down in view of their increasing liability on the state government. "The state government should...
take a decision regarding winding up of these corporations as no decision about their continuation or otherwise has been taken after they became non-working," the CAG report for the financial year ending March 2013 placed in the state assembly said on July 15.
The CAG report added there are 40 non-working PSUs in the state, out of which seven are under liquidation process and 33 are almost defunct and a liability on the state government.
The CAG report says that lack of effective management and accountability has resulted in a huge loss of Rs.2,495.44 crore from the 31 working PSUs in Bihar between 2010-11 and 2012-13. "The loss was much higher at Rs.1,539.24 crore in 2010-11 followed by Rs.852.42 crore in 2011-12 and Rs.103.78 crore in 2012-13. These are test checks of records of the PSUs. The actual controllable loss could be much more," the report said.
The report also highlighted that of the 31 working PSUs, only 15 earned profit of Rs.135.74 crore, while 10 incurred losses of Rs.1,222.18 crore. Of the remaining six PSUs, one has submitted its first account and five are yet to finalise their accounts.
The development comes against the backdrop of the Central government taking a number of measures for reviving loss-making PSUs.
As on March 31, 2012, of the 260 CPSEs, about 66 were sick units, and the government has time and again recommended packages for revival of such sick PSUs. The government on December 27 provided Rs 116.86 crore to 11 sick public sector units (PSUs) towards payment of wages and other dues. The decision to provide funds to these sick PSUs was taken by the Cabinet Committee on Economic Affairs (CCEA).

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