In your interest.
Online Personal Finance Magazine
No beating about the bush.
According to a an economic survey carried out in Bihar, poor turnover and constantly increasing losses are plaguing the state’s public sector units
State-run or public sector units (PSUs) in Bihar have become white elephants and a big drain on the exchequer, says a survey, reports PTI.
The state Economic Survey presented in the Bihar Assembly during the ongoing 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 that of the 51 government companies as on March 2008, the majority lacked rigorous accountability structures.
The report said that the total investment in the public sector as on March 2006 was Rs8,631.32 crore, comprising equity of Rs622.70 crore (7.21%) and long-term loans for Rs8,008.62 crore (2.79%). 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 that 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 to Rs854.61 crore in 2006-07 from Rs54.30 crore in 2004-05. "The accumulated loss of the BSEB has been increasing steeply and stands at more than Rs1,524 crore at the end of 2007-08. The return on investment has been negative and the government has paid a subsidy of more than Rs2,300 crore during the period from 2004-05 to 2006-07," the survey report said.
The total government loans due from the Board stood at more than Rs6,200 crore as on March 2007, the Survey said.