The recent press conference held at the Citizen Action Party’s (CAP) headquarters in Sikkim shed light on a deeply concerning issue: the precarious financial state of the state-owned Public Sector Undertakings (PSUs). Ganesh Rai, the leader of CAP, took the stage to reveal the distressing findings from the Comptroller and Auditor General (C&AG) of India’s audit of these entities, raising serious questions about their sustainability and impact on the state’s economy.
Ganesh Rai’s address to the media highlighted that the audit report, presented during a session at the Sikkim State Legislative Assembly, painted a disheartening picture of the PSUs’ financial health. These entities, established with the intent of driving economic growth and generating employment opportunities, have instead become a significant drain on the state’s resources. The accumulated losses of these PSUs for the fiscal year 2019-20 amounted to an astonishing Rs 2266.62 Crores.
Ganesh Rai emphasized the critical role that PSUs play in a state’s economic landscape. He pointed out that they are meant to contribute to revenue generation and employment opportunities, which in turn support the government’s developmental activities. However, the recent audit findings have highlighted a starkly different reality. Notably, a few PSUs managed to achieve negligible profits, while others suffered severe losses. This disparity in performance raises concerns about the effectiveness of the management and operations of these entities.
The audit report drew attention to several specific PSUs that are on the verge of closure due to their accumulated losses. Among these entities are Teesta Urja Limited (now renamed as Sikkim Urja Limited), Sikkim Power Investment Corporation Limited (SPICL), Sikkim Power Development Corporation Limited (SPDC), and SIDICO. The accumulated losses for these PSUs have eroded their capital to such an extent that they face an uncertain future. The audited figures show that the total outstanding loan till 2019-20 reached Rs 13468.47 Crores, the net loss for the same period was Rs 438.76 Crores, and the total capital employed was Rs 15054.90 Crores.
The state’s goal to promote developmental activities hinges on having a robust financial base, and the performance of PSUs has a significant impact on that objective. CAP’s press conference highlighted the urgency for the government to undertake measures to improve the financial health of these PSUs. This could involve restructuring, effective management strategies, and exploring opportunities for profit generation to mitigate the current losses.
The Sikkim government’s decision to levy a fine of Rs 5,000 for feeding monkeys has been seen as an effort to address the increasing instances of human-monkey conflict. However, this move also underscores the need for thoughtful conservation and wildlife management practices, especially considering the delicate balance between humans and animals in the region.
The CAP’s press conference raised a larger concern about the financial sustainability of state-owned enterprises and their ability to contribute positively to the state’s growth trajectory. As the government assesses its approach to PSUs, a comprehensive strategy to rejuvenate their financial health and operational efficiency could prove crucial to steering these entities away from further losses and potential closures.