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Net worth of 77 CPSEs eroded with 184 reporting Rs 1.42 lakh cr loss: CAG
The accumulated losses of 184 central public sector enterprises (CPSEs) stood at Rs 1.42 lakh crore as on March, 2018, according to the Comptroller and Auditor General of India which has found that the networth of 77 of these companies has been completely eroded by it.
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In a report tabled in Parliament on Tuesday, the CAG report on Union Government (Commercial) has said the losses reflect the erosion of capital in government companies.
“Of the 184 CPSEs, 130 CPSEs incurred losses in the year 2017-18 amounting to Rs 21,755 crore, 54 CPSEs had not incurred loss in the year 2017-18, even though they had accumulated loss of Rs 11,664 crore. 66 of the CPSEs were under winding up, closure, liquidation and strategic disinvestment, the report said.
Government’s top auditor said the net worth of 77 out of 184 CPSEs had been completely eroded by accumulated loss and their networth was either zero or negative. The net worth of these 77 CPSEs was (-) Rs 83,122 crore against equity investment of Rs 40,155 crore in these CPSEs as on March 31, 2018.
This included six listed companies, whose net worth was (-) Rs 32,606 crore against equity investment of Rs 6,685 crore in these CPSEs. Out of 77 CPSEs, whose capital had been eroded (being zero or negative net worth), 12 CPSEs had earned profit of Rs 1,344 crore during 2017-18.
The CAG said in 20 out of 77 CPSEs whose capital had been eroded, Government loans outstanding as on March 31, 2018 amounted to Rs 6,044 crore. This included two listed companies with outstanding Government loan of Rs 1,877 crore.
Net worth was less than half of their paid up capital in respect of 25 out of 341 CPSEs whose net worth was positive at the end of March 31, 2018, indicating their potential sickness.
The CAG report revealed that the government overshot the disinvestment targets in 2017-18.
Against a Budget Estimate of Rs 72,500 crore and a Revised Budget figure of Rs 100,000 crore, the realisation was Rs 100,057 crore. The government of India divested its share in 36 cases through different modes and routes during 2017-18.
Audit observed that income from SUUTI (Specified Undertaking of the Unit Trust of India) investment is not a part of disinvestment.
As per directions received from GOI and subsequent approval given by the Advisory Board of SUUTI from time to time, SUUTI is remitting the interest and dividend received on SUUTI’s investment to the Government.
In the absence of complete information, Audit could not verify whether the objective of promotion of public ownership of CPSEs was successfully achieved during 2017-18, the report said.
Divestment not on the basis of profit or loss: Govt
Amid questions raised over stake sale in profit-making PSUs, the government on Tuesday said in Rajya Sabha that the criteria for disinvestment were not profit or loss. In oral reply to a question from Shiv Sena MP Sanjay Raut, Minister of State for Finance, Anurag Thakur said that the criteria for disinvestment have been fixed by Niti Aayog and it is not on the basis of profit or loss. The Minister said the criteria have been decided on the basis of national security, sovereign functions, market imperfections and public purpose. “The government follows the policy of disinvestment, strategic disinvestment of CPSEs, which are not in priority sector,” Thakur said in the Upper House.
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