The sorry state of state government-owned PSUs

With many unlisted and not scrutinized by analysts and some remaining hidden from the public eye, the financial health of lesser known state government-owned PSUs is taken in lesser consideration.

Published: 08th August 2019 08:25 AM  |   Last Updated: 08th August 2019 08:25 AM   |  A+A-

PSU crisis, State PSUs

Representational Image

By Express News Service

While the sorry state of central public sector enterprises (CPSE) is well known, the financial health of lesser known state government-owned PSUs and statutory corporations remain largely hidden.

This is mostly because many are unlisted and not scrutinised by analysts, remaining hidden from the public eye, too. These include state road transport corporations, state electricity generation and distribution companies,  state financial corporations, and numerous others in sectors from water to warehousing. Though state governments are the most diversified business owners in the country, the bigger question is whether they make money. India’s states own 1,309 public sector enterprises of which 989 are deemed working. Losses incurred by states’ PSUs stood at a whopping Rs 97,078.61 crore (almost three times that of central PSUs) and profits earned were a paltry Rs 17537.38 crore. In fact, state governments are sitting on nearly Rs 3.81 lakh crore of accumulated losses.

A recent CAG review also found chronic afflictions such as the absence of a business plan, no production or marketing policies. Here’s a look at how different states’ listed PSUs have performed:

Uttar Pradesh

UP has 103 SPSUs (38 non-functional) including development corporations for almost everything from fishery, poultry, piggery, and livestock to police housing and small industries. Out of these 103 PSUs, only 40 finalised their accounts in the last three years and 95 had arrears from 1981-82 onwards. According to the finalised accounts, 22 PSUs had earned a profit of Rs 963.97 crore, while 17 had incurred a loss of Rs 19,299.56 crore.

The one remaining firm  reported no profit or loss. Total investment in these PSUs by the UP government was Rs 2.4 lakh crore. But, they made  an average negative Return on Investment of 19 per cent, leading to a total loss of Rs 11,920.32 crore to the exchequer


CAG found that losses accumulated by 73 working state PSUs in Gujarat add up to Rs 9,949.78 crore. For the year ended March 2018, as many as 50 PSUs of the Gujarat government posted cumulative profit of Rs 5,113.94 crore, while 19 such entities incurred losses of Rs 3,813.93 crore. The findings are based on the latest finalized accounts wherein the investments in these SPSUs stood at Rs 1.57 lakh crore. Gujarat State Petroleum Corporation Ltd alone posted a loss of over Rs 1,500 crore, the highest among loss-making state PSUs, followed by Sardar Sarovar Narmada Nigam Ltd (Rs 1,075.8 crore) and Bhavnagar Energy Company Ltd (Rs 617.31 crore).

West Bengal

The state owns 92 public sector enterprises of which 73 are working. Of these only 33 had finalised accounts for 2016-17. Of the 33 which did file accounts, 21 had earned a profit of Rs 621.59 crore and 11 had incurred losses of Rs 665.34 crore. CAG’s analysis on accumulated losses disclosed that in respect of 30 working PSUs, their entire net worth had been eroded. The total accumulated loss of these PSUs was Rs 9,026.60 crore against paid-up capital of Rs 1,717.68 crore.


The state of Bihar owns 74 public sector enterprises. Of these only 30 are functional, with the remaining are not working. Of these 30 entities, only 18 enterprises managed to finalise their accounts — 11 have reported a profit of Rs 278.18 crore and seven have incurred losses. The cumulative losses at Rs 1,437.93 crore are nearly five times the profits and accumulated losses amount to Rs 11,715.65 crore. However, losses could be more as 56 PSUs are yet to file final accounts and the pendency dates back to 1977-78.

Tamil Nadu

Out  of 68 working  PSUs, 39 PSUs earned  profit of Rs 931.08 crore and 25 PSUs incurred loss of Rs 9,366.31 crore. The major contributors to profits were Tamil Nadu Newsprint and Papers Limited (Rs 257.53 crore), Tamil Nadu Power Finance and Infrastructure Development Corporation Limited (Rs 129.74 crore), TIDEL Park Limited (Rs 49.28 crore), IT Expressway Limited (Rs 33.39 crore), Tamil Nadu Industrial Investment  Corporation Limited (Rs 30.97 crore) and Tamil Nadu Magnesite Limited (Rs 21.74 crore). These PSUs had accumulated losses of Rs 78,854.25 crore as per their latest finalised accounts.


Rajasthan has 43 SPSUs consisting of three statutory corporations and 40 government companies, of which three are non-functional. Power PSUs form a critical role in the state with government spending over 94.4 per cent of the total investment of Rs 1,27,732 crore in the sector. The accumulated losses of the power sector companies were as high as Rs 98,929.72 crore. Of the 15 power PSUs, the net worth was eroded completely in Jaipur Vidyut Vitran Nigam Limited (Rs(-) 22,341.63crore), Jodhpur Vidyut Vitran Nigam Limited (Rs(-) 22,116.53 crore), Ajmer Vidyut Vitran Nigam Limited (Rs(-) 20,551.94 crore) and Giral Lignite Power  Limited (Rs(-) 570.59 crore).

Meanwhile, of the 25 non-power sector operational PSUs, 19 earned a total profit of Rs 350.08 crore and six PSUs incurred losses of Rs 1,278.43 crore in 2017-18. Overall, the accumulated losses doubled from Rs 50,951 crore in 2012 to Rs 1,01,241 crore in 2017.

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