The Hindu Business Line : Net worth in 98 PSUs negative: CAG

EVEN as the disinvestment of public sector enterprises (PSUs) in the country remained mired in controversy and dilatory tactics, the Comptroller and Auditor General of India (CAG) has said that the aggregate net worth of as many as 98 companies out of 276 government companies/corporations (excluding deemed government companies) has become negative to the extent of Rs 37,745.17 crore as on end-March 2003.

In his report on PSUs review of accounts, tabled in Parliament, the CAG said that due to the complete erosion of the equity investment in these companies by their accumulated losses, recovery of the loans given by the Government to these companies has become "doubtful".

The accumulated losses in these 98 PSUs have escalated by Rs 12,860 crore from Rs 55.295 crore in 2000-01 to Rs 68,155 crore in 2002-03 i.e, by 23.26 per cent. Out of these 98 companies, 62 have already been referred to the BIFR, the report said.

The reports said that only 139 PSUs could earn profits during 2002-03 and 125 PSUs suffered losses.

Out of the total profit of Rs 44,298.14 crore earned by 139 PSUs, the major contribution came from only 45 PSUs in five sectors, viz., coal and lignite, telecommunications, petroleum, power and financial services. They contributed Rs 38,008.35 crore, i.e., 85.80 per cent of the overall profit earned by the PSUs.

Out of the 139 PSUs, which earned profit, only 91 PSUs declared dividend for the year 2002-03 amounting to Rs 13,773.81 crore and out of this Rs 10,201.72 crore were paid/payable to the Government of India, excluding dividend of Rs 5.46 crore declared by one PSU out of reserves. The latter represented 9.90 per cent return on the total investment by the Government of India (i.e., Rs 1,03,388.56 crore) in all the PSUs.

Out of the total dividend of Rs 13,779.81 crore declared by PSUs in 2002-03, PSUs under the Ministry of Petroleum and Natural Gas, operating partially under the administered/regulated prices, contributed Rs 8,849.46 crore, representing 64.22 per cent of the entire dividend declared by all Central Government companies.

Non-compliance of Government's directive in the declaration of dividend resulted in a shortfall of Rs 8,810.05 crore in the payment of dividend for the year 2002-03.

The report said that in 140 PSUs, the value of inventory (stores and spares) was more than 33 per cent of their annual consumption. In 123 of these PSUs, it exceeded 50 per cent of annual consumption.

In 63 PSUs, finished goods held in stock were more than one month's sales. In 115 PSUs, the value of surplus, obsolete and non-moving stores was Rs 2800/75 crore.

CAG said the market value of shares of 21 listed Government companies as per prices prevailing in stock markets on March 31, 2003 stood at Rs 1,19,747.52 crore. This compared favourably with the total book value of their shares at Rs 93,135.41 crore.

Market value of shares held by Government of India in these companies stood at Rs 95,174.87 crore as on March 31, 2003 as compared with the book value of Rs 73,136.38 crore.