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The Comptroller and Auditor General has expressed serious concern about accumulation of losses by six public sector undertakings which it felt was eroding public wealth.
In its report on PSUs for the year ended March 2017, which was submitted in the Legislative Assembly on Thursday, the CAG highlighted that the accumulated losses of six PSUs were ₹21,472 crore.
As of March 31, 2017, investment capital and long-term loans in 43 working public sector undertakings was ₹58,746 crore. In respect of 15 PSUs (exclusive Telangana PSUs), the investment has grown by 246 per cent to to ₹31,215 crore in 2016-17 from ₹9,019.60 crore in 2012-13.
Increase in investment was due to more investment in the service sector. The government utilised major portion of loans raised by Telangana Drinking Water Supply Corporation Ltd for the investment.
69 under audit umbrella
The CAG said as of March 31, 2017, there were 69 PSUs under the audit. Of these, 43 were working PSUs, with 15 pertain exclusively to Telangana and 28 formed due to bifurcation of the State.
Four other PSUs were under demerger and the remaining 22 were non-working PSUs (yet to be bifurcated). The investment capital and long-term loans in 69 PSUs was ₹59,211.85 crore.
Of the 43 working PSUs, only 18 submitted their accounts as of September 30, 2017. The turnover of 18 PSUs was ₹47,329.46 crore.
Significantly, the return on equity and return on investment for 18 working PSUs was minus 17.81 and minus 11 per cent respectively based on latest finalised accounts till September 30, 2017.
Exceeds approved limits
In the Performance Audit on the functioning of the Southern Power Distribution Company of Telangana Ltd, the CAG observed that the company purchased short-term power in excess of State Electricity Regulatory Commission limits and at rates higher than the maximum ceiling limits set by the State Electricity Regulatory Commission. This resulted in an extra cost of ₹5,820.9 crore during 2012-2017.
It also exceeded the approved limits of power supply during 2012-2017 resulting in additional burden of ₹1,744.56 crore on the distribution company.
While the company reported continuous reduction in energy losses, the losses were higher than the norm fixed by the regulator. This resulted in additional loss of ₹1306.76 crore, the CAG observed.
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