Do we really need those PSUs? -Governance Now

Do we really need those PSUs?

They serve no purpose, says Bihar Economic survey

PTI | March 15, 2010

File photo of Bihar Chief Minister Nitish Kumar

Public sector enterprises in Bihar have become white elephants and a big drain on the exchequer, says a survey.

The state Economic Survey presented in the Bihar Assembly during the on-going session presented a bleak future for the 51 government-run companies--17 working and 34 non-functioning --and suggested merger of working PSUs and immediate closure of the non-functioning units.

The survey report said of the 51 government companies as on March 2008, the majority lacked rigorous accountability structure.

The report said the total investment in public sector as on March 2006 was Rs 8,631.32 crore, comprising equity of Rs 622.70 crore (7.21 percent) and long term loans for Rs 8,008.62 crore (2.79 percent). Mainly due to poor turnover and ever increasing losses, the Bihar government has been left with no other choice but to wind up the loss making units, the survey suggested. .

The Economic Survey report said the four statutory corporations of the state government - Bihar State Electricity Board (BSEB), Bihar State Financial Corporation (BSFC), Bihar State Road Transport Corporation (BSRTC) and Bihar State Warehousing Corporation (BSWC) are running at huge losses.

The loss of BSEB increased from Rs 54.30 crore in 2004-05 to Rs 854.61 crore in 2006-07. "The accumulated loss of the BSEB has been increasing steeply and stands at more than Rs 1,524 crore at the end of 2007-07. The return on investments has been negative and the government has paid a subsidy of more than Rs 2,300 crore during the period from 2004-05 to 2006-07," the survey report said.

The total government loan due from the Board stood at more than Rs 6,200 crore as on March 2007, the Survey said.

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