CAG for closing losing PSUs in Rajasthan

The Comptroller and Auditor General of India has recommended closure or improving the performance of some of the state government companies.

The CAG, in its report tabled in the state assembly recently, has said that even after their existence of 22 and 41 years, respectively, the turnover of two government companies had been less than Rs 5 crore and of three non-functional companies, the turnover had been zero in each of the preceding five years according to their latest finalised accounts.

Similarly, four government companies had been incurring losses for five consecutive years leading to negative net worth. "In view of poor turnover and continuous losses, the government should either improve the performance or consider their closure," says the report.

The report said inspite of the management of Rajasthan State Hotels Corporation Ltd and Rajasthan Tourism Development Corporation Ltd having proposed a merger of the two in 2001, the merger has not taken place until now.

According to the latest finalised accounts, eight working PSUs earned aggregate profit of Rs 226.25 crore. Five working government companies declared dividend of Rs 17.21 crore. Against this seven PSUs incurred an aggregate loss of Rs 10.87 crore according to their latest finalised accounts.

Of the loss-incurring working government companies, two had accumulated losses of Rs 44.70 crore, which exceeded their paid up capital of Rs 7.61 crore. The report said that one corporation, which earned profit during 2005-06, had accumulated loss of Rs 62.48 crore against its paid up capital of Rs 81.53 crore.

The total investment in working PSUs increased from Rs 13,805.85 crore on March 31, 2005 to Rs 16108.92 crore on March 31, 2006. The total investment in non-working PSUs increased from Rs 12.10 crore to Rs 13.98 crore during the same period.