CAG flagsRs 1000cr PSU losses

Patna: The Comptroller and Auditor General (CAG) report for the financial year ending March 31, 2017 pegs losses by state government public sector units (PSUs) in the last three years at Rs 1,159.75 crore.

The report was tabled by deputy chief minister Sushil Kumar Modi in both legislative houses on Tuesday. Out of 30 working PSUs and 44 non-working PSUs, only 16 working and two non-working PSUs had finalised their amounts from 2014-15 to 2016-17. Of these 18 PSUs, 10 registered over Rs 278 crore in profit.

Seven of the PSUs incurred a loss of Rs 1,439.93 crore. The CAG has remarked that continued existence of loss-making PSUs constitute a substantial drain on the public exchequer and the state must review their functioning and initiate a process of winding up.

The report indicates that 91 per cent of the total investment made by the state government on PSUs was in power – Rs 39,492 crore in the last five years. The annual report of PSUs like Bihar State Financial Corporation, Bihar State Warehousing Corporation and Bihar State Road Transport Corporation has not been tabled in the legislature for one, three and 32 years respectively. The CAG remarks that delay in tabling of annual reports weakens legislative bodies’ control over PSUs.

The report mentions that five non-working PSUs are under liquidation for 5-18 years and that the government supports 10 non-working PSUs to the tune of over Rs 1007 crore in the last three years.

About the Bihar Building Construction Corporation, it noted that the company did not have a full time managing director (except once) since its inception in 2010. “There was acute manpower shortage – as against sanctioned strength of 428, the actual manpower was only 132. The report has taken exception to the corporation undertaking work without administrative approval from the user department. It also hinted at violation of Bihar financial rules in tendering of work and failure of the government to use eco-friendly fly ash bricks.”

The report also hints at irregularities in the functioning of Bihar State Educational Infrastructure Development Corporation. There were no provisions of furniture in the estimates of 297 model schools constructed at over Rs 555 crore. “As such, none of these schools could be used, resulting in denial of quality education to trural students,” it noted, alleging that the corporation had not availed central excise duty exemption of over Rs 10 crore in World Bank projects.

Bihar State Food & Civil Supplies Corporation Limited has been charged by CAG of procuring gunny bags by violating rules and hints at a “suspected collusion of company officials” on supply of gunny bags. It has accused the Bihar State Text Book Corporation of paying a consultant over Rs 1 crore on an unnecessarily renewed service contract for three years. It has also hinted at six PSUs incurring over Rs 2 crore for purchase of gilt items to legislators, officers, journalist and other dignitaries. Bihar Power (Holding) Corporation Limited has been accused of revision of power purchase agreement resulting in a loss of over Rs 61 crore.

Courtesy: The Telegraph