Fewer PSUs in the red, says CAG report

The number of loss-making public sector companies has been coming down while improved performance by other state-owned companies has enabled the government to bring down waivers for them, the Comptroller and Auditor General observed.

"The number of loss-making companies has gone down to 101 in 2004-05 from 121 in 2002-03. The total loss incurred by these companies has also come down to Rs 9,688.06 crore in 2004-05 from Rs 11,979.16 crore in 2002-03," according to the CAG's report. The CAG analysed 278 of 388 government and deemed government companies.

The accumulated losses of PSUs, however, increased to Rs 85,357.67 crore from Rs 81,786 crore in 2003-04.

The equity capital of 88 PSUs under 20 ministries and departments has been completely eroded. The losses were Rs 82,001 crore against an investment of Rs 14,469 crore, as on March 1, 2005.

Railways bypassed selection norms
Coming down heavily on the railways for selection of unviable projects, the CAG has said the railway ministry should ensure that norms be adhered to.

"Although norms have been established by the railways for selection of projects, including a minimum rate of return, projects were sanctioned without adequate justification and decisions were taken during implementation without keeping in mind the original objectives," the CAG report for 2005 said.

Road scheme trails
The rural roads programme is progressing much slower than targeted, the CAG said.

The CAG noted that out of 13 gauge conversion and new line projects, 46 had a negative rate of return while the rate of return on 61 projects was less than the required rate of 10 per cent, its audit covering 2000-05, the CAG said spending was much below the targeted amount and projects were running way behind schedule in many cases due to "inaccurate planning, unrealistic estimation and inadequate mobilisation of funds."