While the sorry saga of the central public sector undertakings (PSUs) has been well documented, the financial health of lesser-known state government PSUs remain largely hidden. Mostly because many are unlisted and are not scrutinised by analysts, remaining hidden from the public eye too. But, a deep dive into their financials paints a telling picture on the state of PSUs in the Delhi and NCR areas.
A look at the latest audited financial reports show that 15 PSUs operating in the region had a return on investment of just 0.05 per cent against a total investment of 30,433 crore in 2016-17, resulting in a total loss to the exchequer of 2,520.95 crore in the said year alone. Unsurprisingly, accumulated losses for far stand at a mighty 25,470 crore as of the end of 2016-17. Also, the overall economic importance of the state PSUs within the state’s economy – as measured by turnover as a ratio of state GDP – are unimpressive. In percentage terms, this figure decreased from 2.16 per cent in 2012-13 to 1.24 per cent in 2016-17.
The principal contributor to these huge losses has been the Delhi Transport Corporation (3,411 crore). Despite having a daily average footfall of about 30 lakh passengers — eight lakh more than Delhi Metro — DTC continues to be the biggest loss-making state road transport unit in the country. While DTC officials blame non-revision of fares as one of the reasons for poor performance, the biggest reason for recurring losses is the piling debt and slow resolution.
For instance, the company has “failed” to recover losses from its maintenance contractor for 17 buses that were gutted in a fire in 2015, resulting in total loss of 2.82 crore up to June 2017, according to the Comptroller and Auditor General of India (CAG).
The company has suffered an annual loss of contribution of 1.13 crore, it added. With a fleet size of just 3,800 buses — the lowest in the country — it has to spend as much as 34,000 per bus on a daily basis, said a DTC official. Against this, it is able to earn only `6,000 per bus, he added. Meanwhile, another PSU — the Delhi SC/ ST/ OBC/ Minorities & Handicapped Financial and Development Corporation Limited — had account arrears of nearly 13 years as on September 30, 2017. Despite drawing 37.48 crore from apex corporations between 2012-17 to provide credits to target groups, the company disbursed only 13.13 crore.
Instead, the CAG found that it has kept the funds idle in banks and interest thus earned was used to meet its establishment expenditure. Moreover, disbursement of loans which was 45.41 per cent of total available funds in 2012-13 declined significantly to 12.90 per cent in 2016-17. Questioning the existence of the company, CAG says that the firm is ripe for sale or closure since most banks have better know-how now — right from project evaluation to the recovery stage.
The CAG’s report also notes that the records of state PSUs and the state government do not tally. These figures were not reconciled for as long as three years, says the country’s apex auditor. Yet, there has been little or no action from the government on these observations.