Chhattisgarh's PSUs Struggle With High Investment, Low Return: CAG Report
The report stated that the net worth of five out of 28 PSUs had been entirely eroded by accumulated losses, leaving their net worth in the negative
Public sector undertakings (PSU) often came to light due to poor performance or lower revenue generation. In a similar case, a Chhattisgarh state-owned PSU wasn't able to give a one per cent return despite of Rs 7,447.77 crore investment.
A Comptroller and Auditor General of India (CAG) report revealed this bad shape of PSU when it was tabled in the state assembly after the ending of state finances for the year 2023.
Chhattisgarh government had invested Rs 7,447.77 crore in 10 statutory corporations, 28 government companies, 21 joint stock companies, two rural banks and 1,460 co-operative institutions in the state as of, 31 March 2023.
The CAG stated in their report, “During 2022-23, the return on investment was Rs 6.20 crore (0.08 per cent),”. On the other hand, the government paid interest on its borrowing at an average rate of 6.91 per cent during the same period.
The composition of the investment in 28 state-owned PSU then it comprises 33.79 per cent of equity capital and 66.21 per cent of long-term loans.
The report also highlighted that losses have increased to Rs 1,143.10 crore from Rs 433.14 crore in 2020-21.
It was also revealed that seven loss-making public sector undertakings (PSUs) had an equity (comprising paid-up capital and defaulted loans) of Rs 2,972.81 crore, while their overall net accumulated losses amounted to Rs 10,034.72 crore. This significant loss led to a depletion in the net worth of these PSUs, resulting in a negative net worth of Rs 7,061.91 crore as of 31 March 2023.
Additionally, the report stated that the net worth of five out of 28 PSUs had been entirely eroded by accumulated losses, leaving their net worth in the negative.
On a more positive note, ten out of twenty PSUs reported profits amounting to Rs 879.22 crore in the financial year 2022-23. This marks an improvement compared to the previous year, where nine PSUs earned a combined profit of Rs 540.16 crore in 2020-21.
