PSUs in the red

Published at September 04, 2018 12:37 AM 0Comment(s)2949views


PSUs in the red

The liabilities due to Public Sector Undertakings that have been failing year after year to pull themselves out of the losses have put a lot of burden on the state exchequer. As per the government data released earlier this year, 18 PSUs suffered losses amounting to Rs 191 crore in previous two years with J&K Cements Ltd  at the top of the list. A CAG report published few years ago showed the red balance of PSUs to be around Rs 1450 crore. The worst performers back then were PDC, SRTC, J&K Minerals, Industrial Development Corporation, Financial Corporation, Handloom Development Corporation, and Handicrafts Corporation. A report on the health of PSUs published this year showed some improvement in performance in State Industrial Development Corporation, JK Handloom Corporation, JK Handicrafts Corporation and the Horticultural Produce Marketing and Processing Corporation. As per this report those undertakings that have showed profitability include JK Police Housing Corporation, JK Cabe Car Corporation, JK Small Scale Industries Development Corporation and JK Women’s Development Corporation. Despite the change of governments and finance ministers who assured that PSUs will be brought back on track, there is little hope left that the undertaking may see better days in future.  In 2016, then Finance Minister Haseeb Drabu asked PSUs to compete for business. Drabu also presented a rosy picture of the future prospects regarding PSUs and government plans to fix the loopholes.  The government seems to have got used to the misfortunes that have been both brought by the PSUs and suffered by the PSUs. What is really unfortunate is that successive governments have not tried to find out the real causes of poor performance of PSUs. Although there are speculations that most of the ills in the PSUs are centered on faulty middle and top management levels, nothing can be said with certainty as the PSUs have different structural composition and operational models. Perhaps it is public money and public sector that are affected and that is why governments have not paid any heed to cut down the losses. An official of the finance department told one news organization that the process of cleaning up the balance sheets has started which will improve them before their restructuring. The fact is that successive governments have been both lenient while dealing with the PSUs as well as incompetent. Its result has been the red balance and the growing liabilities due to malfunctioning public sector undertakings. The government has to take a call sooner or later – give a deadline to the PSUs before shutting them down.    

 

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