BHUBANESWAR: Even though the State Government invested a large amount of money in a number of corporations and other organisations over the years, the returns were very low.
According to the latest report of the Comptroller and Auditor General (CAG), the State Government had invested Rs 2,190.37 crore in statutory corporations, rural banks, joint stock companies and cooperative banks by March 31, 2011. But the returns were negligible in absolute terms, it added.
The average return on this investment was 8.44 per cent in the last five years (4.64 per cent during 2010-11) while the State Government paid an average interest rate of 7.39 per cent to 8.18 per cent on its borrowings during 2006-07 to 2010-11.
The investment of the State Government by 2010-11 included Rs 1,826.17 crore in 83 public sector undertakings (PSUs) comprising 80 government companies (Rs 1,333.71 crore) and three statutory corporations (Rs 492.46 crore). However, a dividend of Rs 101.58 crore was received from one statutory corporation and three companies during 2010-11. The dividends paid by different companies included Rs 13 lakh by Odisha State Warehousing Corporation, Rs 100 crore by Odisha Mining Corporation (OMC), Rs 46 lakh by Odisha State Cashew Development Corporation Limited and Rs 31 lakh by Industrial Development Corporation.
While the Odisha State Cooperative Bank paid a dividend of Rs 39 lakh, the Odisha State Cooperative Land Development Bank paid Rs 29 lakh. The contribution of the OMC was 98.44 per cent of the total return received by the Government last year.
According to the CAG, two statutory corporations, 77 government companies and 29 cooperative societies where Rs 490.7 crore, Rs 1,242.54 crore and Rs 320.98 crore were invested respectively, did not return any dividend to the Government for its equity holdings.
The Grid Corporation with accumulated loss of Rs 101.25 crore as of 2008-09, the Odisha State Road Transport Corporation (OSRTC) with ` 228.02 crore loss as of 2007-08, the Odisha State Financial Corporation with ` 375.75 crore loss as of 2009-10 and the Odisha Forest Development Corporation with Rs 159.2 crore loss as of 2008-09 were among the major loss-making PSUs in the State.
As per the budget of 2011-12, there are 32 working public sector undertakings in the State. The other 51 PSUs are non-working. The Thirteenth Finance Commission recommended to the State Government to draw up a road map for the closure of the non-working PSUs. However, the State Government is yet to take any step in this regard.
Besides investment, the State Government also provides loans and advances to these organisations. The loans and advances by the State Government increased by Rs 281 crore from Rs 3,133 crore in 2009-10 to Rs 3,414 crore in 2010-11.
Major portions of loan advanced during 2010-11 were to Odisha Grid Corporation - Rs 205 crore, government servants - Rs 53.13 crore and public sectors and other organisations - Rs 44.30 crore.