CAG paints a grim picture of public sector enterprises
Return on investment fell to 16.4% in 2020-21 from 37.33% in 2010-11; However, RoE in 251 PSEs, improved to 16.34% in 2020-21 from 13.54% in 224 PSEs in 2019-20 CAG
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New Delhi: There was a consistent decline in the return on investment (RoI) on the basis of compounded annual growth rate (CAGR) in 58 listed public-sector enterprises (PSEs) in 10 years from 2010-11 to 2020-21.
According to a recent report by the Comptroller & Auditor General (CAG), RoI of PSEs was 37.33 per cent in 2010-11, which came down to 16.4 per cent in 2020-21. In fact, there was not a single year when there was no dip in RoI or it was flat.
Infusion by the Central government in PSEs is in the form of equity, grants, subsidy, etc., for their operational and administrative expenses, the CAG report says. Financial year 2000-01 has been considered as the inception year.
The rate of real return (RORR) has shown a decreasing trend since 2006-07. It was in the range between 10 per cent and 23 per cent from 2016-17 to 2020-21. The company-wise analysis of RORR for the preceding three years revealed that while listed companies gave RORR between 33 per cent and 51 per cent, unlisted PSEs gave negative returns ranging between 3 per cent and 8 per cent during the same period.
There were 717 central PSEs under the audit jurisdiction of the CAG as on March 31, 2021. These included 508 government companies, 203 government-controlled other companies, and six statutory corporations. The above-mentioned CAG report deals with 453 government companies and corporations (including six statutory corporations) and 180 government-controlled other companies. The accounts of 84 PSEs were in arrears for three years or more, or were under liquidation.
Government companies and corporations earned a total profit of Rs195,677 crore during 2020-21 of which, 72 per cent (Rs140,083 crore) was contributed by 97 government companies and corporations in three sectors -power, petroleum, and financial services. It may be mentioned here that PSEs enjoy considerable market dominance in these three sectors.
The return on equity (RoE) in these 251 PSEs, however, improved, going up to 16.34 per cent in 2020-21 from 13.54 per cent in 224 PSEs in 2019-20.
