The sorry state of state-owned firms in Maharashtra

The sorry state of state-owned firms in Maharashtra

The audit report of the Comptroller and Auditor General of India (CAG) for 2009-10 for government companies in Maharashtra has been recently released. It paints a telling picture of the state of the public sector in Maharashtra.

For starters, while the state has 62 working public sector undertakings (PSUs), it has as many as 23 so-called non-working PSUs. “As no purpose may be served by keeping these PSUs in existence, government needs to expedite closing down of the non-working PSUs," the report said.

As for the working PSUs, the aggregate result of their work was that while 36 PSUs earned a profit of 741.56 crore in 2009-10, 21 incurred a loss of 2,101.56 crore. Maharashtra State Electricity Distribution Co. Ltd topped the losers’ chart, with a loss of 1,351.45 crore.

Most of the investments have been in the power sector, since power deficit in the state has been between 25% and 34% of the peak demand during 2005-10. Is the state tackling this on a war footing? Hardly; the report points out that against the required capacity addition of 5,210 megawatts (MW), the actual addition was a mere 625MW during 2005-10.

In an indication of how critical land acquisition has become, the report says that 20 projects have not got off the ground “due to non-acquisition of land".

The report says that Maharashtra State Power Generation Co. Ltd “had not taken up any renovation and modernization (R&M) programme of the existing nine thermal units due in the 10th Five-Year Plan and compromised with technical requirements".

The report has the usual list of errors of omission and commission, but perhaps the most interesting are the comments on the quality of accounts. As many as 49 accounts received qualified certificates from the statutory auditors.

In short, CAG’s report paints a sorry picture of the state-owned companies in Maharashtra.

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