Twenty seven out of 33 working state public sector undertakings are making profits with the state government committed to step up their profitability further and also transform loss making units into profitable ones.
This was stated by state minister for finance and public enterprises Prafulla Chnadra Ghadai.
“The department of public enterprises has initiated a programme to increase profitability of firms that are already making profits. Presently, 27 out of 33 working state PSUs are earning profits while the remaining six are incurring losses. Our department is also focused on wiping out losses of such units and is committed to convert them into profitable firms,” Ghadai told newspersons here.
The department has taken several steps to improve the organizational efficiency of the state PSUs like inculcating high standards of professionalism among the employees and appointing independent directors, the minister said.
Besides, efforts were underway for restructuring of two state PSUs- Idcol Ferrochrome Alloys Ltd (IFAL) and Idcol Kalinga Iron Works Ltd (IKIWL).
For Idcol Kalinga Iron Works, we are thinking of forging joint venture either with a Central or state PSU, Ghadai informed.
Similarly, the state was planning to revamp IFAL through infusion of fresh capital investment, he added.
Two Central PSUs- Steel Authority of India Limited (SAIL) and National Aluminium Company (Nalco) have evinced interest in picking up stakes in IKIWL and IFAl. It may be noted that the 13th Finance Commission had recommended the state government to draw up a road map for closure of non-working PSUs by March 2011 which the state government had not done. The Comptroller and Auditor General of India (CAG) observed there are 32 working PSUs in the state with the other 51 PSUs being non-working.
The state government's investment in most of the PSUs run by it has come a cropper. While the government had invested Rs 2,190.37 crore on statutory corporations, rural banks, joint stock companies and cooperatives by the end of 2010-11, the returns from this investment were negligible on absolute terms.
The latest report on state finances for the year ended March 31, 2011 says the average return on this investment was a meagre 8.44 per cent in the last five years. The return obtained from these PSUs in 2010-11 was Rs 101.58 crore, meaning only 4.64 per cent of the committed investment.
Ironically, two statutory corporations, 77 government companies and 29 cooperative societies where the government had invested 94 per cent of its total investments did not return any dividend to the government. The government had pumped in Rs 490.70 crore on two statutory corporations, Rs 1,242.54 crore on 77 government companies and Rs 320.98 crore on 29 cooperative societies.
