An investment of Rs.5,880.68 crore, including capital and long-term loans, by the government in 116 public sector undertakings (PSUs) in the State has eroded over the years owing to sustained loss. The present net worth of these PSUs, as per their latest finalised accounts, is minus Rs.906.40 crore.

The Comptroller and Auditor General (CAG) report on the PSUs for 2011-12, tabled in the Assembly recently, said the total investment by the State government in the 116 PSUs as on March 2012 was Rs.9,097.98 crore. Of the total investment in 99 working PSUs, capital accounted for 52.11 per cent and loan-term loans 47.89 per cent.

The CAG report came down heavily on the PSUs, where the government had huge financial stakes in the form of share capital and loans, special financial support, and guarantees.

17 non-working

Only 99 PSUs (94 companies and five statutory corporations) were working and 17 were non-working (all companies) as in March 2012. The turnover of the working PSUs, as per their accounts, was Rs.16,171.31 crore, which was equal to 4.95 per cent of the State Gross Domestic Product (GDP).

The CAG pointed out the failure to ensure proper accountability of the government stake in the PSUs (which employed 1.25 lakh employees), absence of accurate figures of investment, arrears in finalisation of accounts, etc.

Of the 77 PSUs with arrears of accounts during 2011-12, as many as 44 earned profits of Rs.645.36 crore and 29 PSUs incurred losses of Rs.477.88 crore. Major profit-making undertakings were: Kerala Minerals and Metals Limited (Rs.115.45 crore), Kerala Financial Corporation (Rs.50.46 crore), Malabar Cements Limited (Rs.30.81 crore), Kerala State Financial Enterprises Limited (Rs.27.94 crore), and Kerala State Industrial Development Corporation Limited (Rs.26.15 crore).

Heavy loss-making PSUs during the period were: the Kerala State Road Transport Corporation (Rs. 376.89 crore) and the Kerala State Cashew Development Corporation (Rs. 68.50 crore). The CAG pointed out that though the Kerala State Electricity Board showed a profit of Rs.240.71 crore through jugglery of figures in compliance with the Central Electricity Regulatory Commission, its operation actually resulted in a loss of Rs.1,693.42 crore.

Only 22 PSUs finalised the accounts for the year 2011-12 and 22 had not even finalised even a single account during the year. As many as 77 working PSUs had arrears of 207 accounts as on September 2012 and the extent of arrears was one to 14 years.

The CAG noted that the actual contribution of the PSUs to the State GDP could not be ascertained due to the delay in finalisation of the accounts. Pointing out that the delay may result in the risk of fraud and leakage of public money, the CAG asked the government to monitor and ensure timely finalisation of accounts with special focus on liquidation of arrears and comply with the provisions of the Companies Act, 1956.