Govt puts PSU restructuring on backburner

Not only this,the Comptroller and Auditor General (CAG) of India,in its successive annual reports,has been expressing concern over the mounting losses some of the state PSUs have been incurring,and suggesting to the government to either off load its stakes in these undertakings or close it down. “The CAG may have its own perception and calculations (on the performance of PSUs). Due to the corrective measures initiated by the government,at least half a dozen boards/corporations that were incurring losses have started making profits. Why should the government kill a hen laying golden eggs?” contends Minister of State for Finance and Industries Saurabh Patel.

Additional Secretary (Bureau of Public Enterprises) N Srivastav told Newsline on Wednesday that the report submitted by the expert committee “is under consideration”. He,however,conceded that the problem of accommodating the

present staff of some loss-making PSUs

in other departments,and also disposing off the assets of these undertakings deterred the government from closing down them. In its report,the committee had recommended to close down two “near defunct” PSUs — the State Warehousing Corporation and Gujarat Sheep and Wool Development Corporation. It had also suggested that the government disinvest its stakes in GACL,GMDC and GIIC,and merge two others — GSFC and GNFC — and go for their phased disinvestments. But,the government has not yet acted on this.

“PSUs like Gujarat State Fertiliser and Chemicals Ltd,GNFC,GMDC and GACL have already started making profits,and hence there is no question of disinvestments in them,” a senior official said,adding that the government is in the process of winding up the operations of two defunct PSUs — Gujarat Industrial Investment Corporation and Gujarat State Financial Corporation,which have stopped lending loans to industries.

A CAG report of 2007-08 tabled in the House during the last Assembly session says the two loss-incurring statutory corporations — Gujarat State Road Transport Corporation and Gujarat State Financial Corporation — had alone accumulated losses aggregating over

Rs 2,305 crore,while the government’s three working companies — State Land Development Corp,Handloom and Handicrafts Development Corp and State Minorities Finance and Development Corp — have incurred losses to the tune of Rs 149 crore. The total investment in the working PSUs was reported at a whopping Rs 47,948 crore,while it was recorded at Rs 803 crore in the 12 non-working PSUs as on March 31,2008. The budgetary support of the government in the form of equity capital,

loans and grants/subsidies to the working PSUs increased from Rs 5,927.35 crore in 2006-07 to Rs 7,021.84 crore

in 2007-08,while the total amount of

outstanding loans guaranteed by the state for all the PSUs was Rs 8,487.96 crore,says the CAG report.