mainly in the power sector with eight companies, with an investment of Rs 1.62 lakh crore accounting for 92.4 per cent of total PSU investments, followed by 20 infrastructure companies which have an investment of Rs 4,491 crore.
These 65 functional PSUs have an annual turnover of Rs 91,397 crore.
However, only 36 of them are profitable, showing a profit of Rs 3,098.8 crore, with one entity, the Maharashtra State Electricity Transmission Company, contributing nearly 84 per cent of the total profit — Rs 2,600 crore.
The 22 loss-making PSUs have cumulative losses of Rs 9,832.49 crore. The Maharashtra State Power Generation Company has reported the highest loss at Rs 8,742 crore.
The 22 non-working PSUs have a total investment of Rs 938.94 crore. “As of March 2016 there were 22 non-working PSUs having investment of Rs 938.94 crore. Some of these companies are non-functional for the last 38 years. This is a critical area as investments in non-working PSUs do not contribute to the economic growth of the state,” the CAG report says.
Whereas the Centre is yet to formulate any concrete policy vis-a-vis the sick PSUs, the task of reviving or shutting down such units has been assigned to Niti Aayog, the government think tank that replaced the earlier Planning Commission under the NDA regime. Niti Aayog has also proposed to shut down ailing PSUs that have no chance of revival.
Earlier, a Parliamentary panel suggested the government to exercise caution in strategic divestment and shutting down sick public sector units. The panel has asked he government to provide reasonable and financially prudent chances for their revival.
In its report, the Department Related Parliamentary Standing Committee on Industry said it is always prudent to keep in mind that CPSEs are also meant to serve certain larger social causes. Referring to 100-per cent disinvestment of Hindustan Newsprint Ltd (HNL), it said the decision was taken despite the dissent of the Department of Heavy Industries.
"Taking this case as a cue, the committee recommends that the Niti Aayog shall be asked to take a more holistic view in case of decisions regarding CPSEs that may be perceived to have a chance of progressing well with a little help.
"This is based on the considered opinion of the committee that CPSEs are still relevant and they may be allowed reasonable and financially prudent chances to revive and restructure," the report said.
It noted that the NITI Aayog has recommended strategic disinvestment of five units, transfer to states of four, one for part divestment and two to be considered for later disinvestment.
The committee observes that if these recommendations are approved, the department will be left with "very few" CPSEs under its administrative control, it said.
In another report on the Department of Public Enterprises (DPE), it said that one of the causes for which the PSUs were envisaged was for equitable economic and social development and it is still relevant to India and it has to be kept in mind along with financial and business prudence while deciding the closure or strategic disinvestment of CPSEs. It says CPSEs should be encouraged to provide permanent employment to people and may be "desisted" from hiring personnel on contract basis.
Currently, sick PSUs are referred to the Board for Reconstruction of Public Sector Enterprises for revival, restructuring, sale or closure. According to a Government resolution, a company will be considered sick if it has accumulated losses in any financial year equal to 50 per cent or more of its average net worth during the four preceding years.