CAG on Maha PSUs: 41 accumulated huge losses, net worth of 31 eroded

Mumbai: The Comptroller and Auditor General of India (CAG) has observed that 41 state public sector undertakings in Maharashtra had accumulated losses of Rs 50,098.55 crore while the net worth of 31 SPSUs, including 13 inactive, had completely eroded.

Further, the total negative net worth of these 31 SPSUs was Rs 9,887.19 crore against the paid-up capital of Rs 7,551.83 crore as of March 31, 2023.

The CAG report on State Finances for the year ended March 31, 2023, was on Friday tabled in the state Assembly.

As per the report, the maximum erosion of net worth was noticed in Maharashtra State Road Development Corporation Limited (Rs 2,948.11 crore), Maharashtra State Road Transport Corporation (Rs 2,610.86 crore), Maharashtra Power Development Corporation Limited (Rs 1,013.63 crore) and Maharashtra State Textile Corporation Limited (Rs 1,006.74 crore).

Out of the total loss of Rs 3,623.40 crore incurred by 45 SPSUs for the period 2022-23, a loss of Rs 3,355.13 crore was contributed by four SPSUs, which have incurred losses of more than Rs 200 crore. These include Maharashtra Power Generation Company Limited (Rs 1,644.34 crore), Maharashtra State Road Transport Corporation (Rs 1,145.57 crore), MSRDC Sea Link Limited (Rs 297.67 crore) and Mumbai Pune Expressway Limited (Rs 266.55 crore).

Further, the net loss after tax amounting to Rs 3,623.40 crore was reported by 39 government-controlled companies at Rs 2,322.19 crore, three statutory corporations (SCs) at Rs 1,223.14 crore and three government-controlled other companies (GCOC) at Rs 78.07 crore.

As of March 31, 2023, there were 110 SPSUs of which 91 are working and 19 are inactive in the state under the audit jurisdiction of CAG.

Out of 110 SPSUs, 39 working SPSUs and five inactive SPSUs did not furnish any financial statements (FSs) by September 30, 2023. As a result of the non-submission of FSs, there is no assurance whether the investment and expenditure had been properly accounted for and the purpose for which the amount was invested by the state government was achieved said the report.

During 2022-23, a total of 52 SPSUs registered an annual turnover of Rs 1,22,154.70 crore, which was equal to 3.46 per cent of the GSDP of Maharashtra.

The investment of the state government in equity and long-term loans in these SPSUs was Rs 2,33,626.89 crore as against the total investment of Rs 4,90,595.02 crore at the end of March 31, 2023, the CAG report said.

Out of the 110 SPSUs, 47 SPSUs earned profits (Rs 1,833.29 crore), while 45 SPSUs incurred losses (Rs 3,623.40 crore) and 10 SPSUs reported neither profit nor loss.

The financial statements for the year 2022-23 were received only from 14 SPSUs within the stipulated time (September 30, 2023). Eight SPSUs have not submitted their first statements since their inception.

The silver lining was that 49 SPSUs had accumulated a surplus of Rs 9,717.76 crore and 12 SPSUs had neither accumulated losses nor surplus, the report said.

CAG has suggested that the state government may review the functioning of all loss-making SPSUs and take necessary steps to improve their financial performance. The government may issue necessary instructions to administrative departments to set targets for individual SPSUs to furnish the FSs in time and to strictly monitor the clearance of arrears.

Further, CAG has recommended that the government review the inactive Government Companies and may take appropriate decisions on their revival/winding up. The government may impress upon the management of profit-making SPSUs to declare dividends as per the Government of Maharashtra Resolution of 2012.