New Delhi, July 9 (Inditop.com) The equity investment in 72 public sector undertakings of the central government has been completely wiped out due to successive losses, eroding the net worth by a staggering Rs.78,665 crore (Rs.786.65 billion/$16.1 billion), India’s official auditor has said.
Referring to the audit conducted for 281 companies, out of 419 central government-run firms, the Comptroller and Auditor General of India said these companies were under ministries for civil aviation, power, shipping, road transport, highways and consumer affairs.
“Due to the negative net worth, recovery of the loans given by the government to these companies was also doubtful,” said the audit report, which was tabled in parliament Thursday.
The report said out of these 281 companies, 185 earned profits during the year, while 70 ended up accumulating losses. In the case of Food Corp of India and Inland Waterways Authority, the government reimburses the deficits.
“The remaining 24 companies had not started their commercial operations.”
The report also said that out of the 72 companies with eroded net worth, as many as 33 had been referred to the Board for Industrial and Financial Reconstruction (BIFR) – the agency with statutory powers to revive or even close down loss-making companies.
“Out of the companies referred to BIFR, 13 companies have been recommended for closure.”
Out of a total profit of Rs.97,919 crore earned by the 185 companies, as much as Rs.74,446 crore was contributed by just 48 firms, notably in petroleum, power, coal, steel and metals sectors. The losses amounted to Rs.96,992 crore.
The audit report further said the review of a total of 366 public sector undertakings revealed that the government has invested Rs.147,126 crore (Rs.1471.26 billion/$30 billion) in the equity capital and granted loans to the tune of Rs.75,799 crore as on March 31 last year.
“The return on net worth of Rs.505,543 crore in all government companies and corporations was 5.8 percent,” it added.
