The Comptroller and Auditor General of India (CAG)’s General Purpose Financial Report on public sector undertakings (PSUs) has reported 63 out of the 131 functional PSUs in Kerala to have incurred losses to the tune of ₹4,065.38 crore, while 55 others earned profit of around ₹655 crore as per their finalised accounts submitted till September 2022.
The report, which was tabled in the Kerala Legislative Assembly on July 11, noted that there are 146 government companies, including 127 functional and 19 non-functional enterprises, and four statutory corporations in the State. While it delved into the operational PSUs, the report did not cover departmentally managed commercial undertakings.
Kerala Minerals and Metals Ltd (₹226.91 crore), Kerala State Beverages (Manufacturing and Marketing) Corporation Ltd. (Bevco) (₹113.13 crore) and Kerala State Financial Enterprises Ltd. (KSFE) (₹77.62 crore) contributed the highest profits (net profit after interest and tax) during 2021-22.
Kerala State Electricity Board Ltd. (KSEB), Kerala State Road Transport Corporation (KSRTC), Kerala State Civil Supplies Corporation Ltd. (Supplyco) and Kerala Transport Development Finance Corporation Ltd. were found to be the biggest loss-making entities by reporting the highest net losses (after tax and interest) during 2021-22 – ₹1822.35, ₹1007.18 crore, ₹403.81 crore and ₹241.31 crore respectively.
The CAG recommended the State government to expedite the process of winding up the 19 non-functional companies that are either defunct or in various stages of liquidation.
Root cause of losses
The government has also been urged to decide on the business models of the loss-making PSUs in order to address the root cause of their losses. In case the business model is unsustainable, the government should close the companies to avoid further straining of the public exchequer, the report stated.
It also called for reconciling differences relating to equity, loan and guarantees in accounts maintained by PSUs and the State government, which have been lying unattended for long.
