Profits of PSUs fell in 2015 -Governance Now

Profits of PSUs fell in 2015

Except power generation, PSUs in other sectors reported a fall in profits or a rise in losses during 2014-15 compared with the previous year

GN Bureau | October 22, 2016

#PSUs #fall in profit #rise in losses

For the first time in five years, the profits of India’s state-owned companies dropped, by about 20 percent in 2015. According to the government data 77 public-sector undertakings (PSUs) reported losses and contribution to the exchequer dropped Rs 20,000 crore over the previous year.

The drop in profits – from Rs 1.28 lakh crore to Rs 1.03 lakh crore – over 2013-'14 comes in the backdrop of prime minister Narendra Modi’s 2016 Independence-day declaration that a “new culture” had helped Air India and telecom company Bharat Sachar Nigam Limited improve performance.

As many as 235 PSUs surveyed by the ministry of heavy industries and public enterprises have seen drop in profits in a year that India’s economy grew 7.3 percent over 4.7 percent in 2013-14.

Except power generation, PSUs in other sectors reported a fall in profits or a rise in losses during 2014-15 compared with the previous year.

Contribution to the exchequer

The government’s companies contributed Rs 20,000 crore less to the public exchequer in 2014-15 than they did the previous year, when they generated Rs 2.2 lakh crore. Even the top profit-making PSUs – companies such as ONGC, Coal India Ltd, Indian Oil and NTPC – saw a 13 percent dip in profits.

A leading reason for the decline in profits was the global slowdown and weakening of international oil prices, leading to a 29 percent fall in export earnings and affecting manufacturing companies.

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