Your Right to Know: Non-working PSUs taking a toll on state coffers

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Of the 87 PSUs, 10 are in the field of power, 16 in finance, nine in manufacturing, 11 in infrastructure, seven in agriculture, four in services and four other in miscellaneous activities. The state also has four statutory corporations, one each in finance, agriculture, services and infrastructure. The government appoints both the chief executive officer and board of directors of these companies.

As of the last financial year, these working companies employed around 2.05 lakh people and their total turnover was Rs 77,426.56 crore.

MCDC and the Western Maharashtra Development Corporation are headquartered in Pune, which is also home to a majority of the other companies. Of the 22-non working companies, five have their headquarters in the city. Like MCDC, these offices are incurring expenses in terms of rent, electricity and miscellaneous other charges.

Reports show that till March 2014, the total investment in these PSUs amounted to Rs 97,137.39 crore, which includes long-term loans and working capital. The investment by the government towards the non-working companies was Rs 726.98 crore.

Other than providing for loans, the state government has been periodically writing off loans of these corporations. In the last three years, the total loan waiver given to these companies was Rs 20 crore.

Documents show that the state’s accountant general, during the course of audit of these corporations, repeatedly pointed to the non-working companies, one of which has arrears pending for the last 15 years. In the past one year, these 22 non-working companies have together incurred an expenditure of Rs 1.62 crore in terms of salaries etc, which was held by the accountant general as “avoidable expenditure”.

An analysis of the non-working companies reveals that many of them have accumulated severe losses, which has crippled their functioning. The total accumulated losses by these companies is around Rs 1,370 crore.

Of these 22 companies, the government has issued closure orders for 10 (accumulated losses Rs1,291crore), but their liquidation process is yet to start.

No decision has been taken in respect to nine companies (with accumulated losses of Rs 48.8 crore). Two companies are under liquidation and one company (Kolhapur Chitranagari Mahamandal Limited) has received orders for revival. Even for the working companies, the performance in terms of recovery leaves much to be desired. Of the total Rs 207 crore due for recovery, these companies could recover only Rs 40.45 crore.

Anant Sardeshmukh, director general of Maharashtra Chamber of Commerce Industries and Agriculture (MCCIA), said the government should look seriously in the matters pertaining to the non-working companies. “These companies were established with a specific goal and due to change of time either the goal is not relevant or the companies have failed to meet them,” he said.

Sardeshmukh said many of these corporations had become irrelevant with the passage of time. “The government should take steps to wind up these bodies,” he said.