For the first time in the last six years, state-owned companies in the state registered a net loss of Rs 105.54 crore during 2012-13, stated a report by the Planning and Economic Affairs (BPE) Department, Kerala.
The situation worsened further in the last nine months, till December 2014.
Major reasons for the underperformance are raw material shortage, operational issues, lack of working capital, lacking economy of sale in operations and high cost of power and fuel.
The report also hinted that the loss might increase in the coming years.
Interestingly, the turnover, net worth, investment, employment, taxes, duties and dividend increased marginally during this period.
“Out of the 87 state-level public enterprises in Kerala, 36 companies incurred `999.17 crore loss as against Rs 893.76 cror e profit made by 51 others.
The Kerala State Road Transport Corporation (KSRTC) incurred the highest annual loss of Rs 495.89 crore, followed by the Kerala Water Authority (Rs 296.93 crore) and the Kerala State Civil Supplies Corporation (Rs 84.67 crore).
The accumulated loss of the KSRTC is Rs 3,014.74 crore while that of the Kerala Water Authority is Rs 1,738.65 crore, as on March 31, 2013. In 2009-10, the profit made by PSUs in the state was `666.38 crore, which came down to a net loss of Rs 105.41 crore in financial year 2012-13,” the report stated.
The KSEB (Rs 240.72 crore), the KSFE (Rs 115.12 crore) and the Kerala Financial Corporation (Rs 103.70 crore) are major profit-making industries.
Analysing the report, M P Sukumaran Nair, director, Center for Green Technology and Management, said there has been a continuous erosion of profits of PSUs from 2009-10.
“Barring inflationary pressure, the performance of these companies have become more or less stagnant. The management in most of these organisations is not professionally competent. Most of the Board of Directors is packed with members who do not have any understanding of the operations of the company,” he said.
It seems that the government is slowly allowing most of the units to reduce their activity and eventually face closure, he pointed out.
Electrical industries, ceramics and refractories, engineering and manufacturing, textiles and traditional industries are the major loss-making sectors.