GUWAHATI: The latest audit by the Comptroller and Auditor General (CAG) for the financial year 2022-23 has revealed a worrying trend in the performance of State Public Sector Enterprises (SPSEs), with inefficiencies, financial mismanagement, and poor governance leading to significant losses. The report, which scrutinizes the functioning of several SPSEs, paints a grim picture of their viability and raises serious concerns about their ability to fulfill their intended public service roles.
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Mounting Losses and Dwindling Returns
According to the CAG report, a majority of SPSEs have been incurring heavy losses, with several enterprises recording negative net worth. The report highlights that these entities are struggling due to misallocation of funds, operational inefficiencies, and a lack of strategic planning.
The financial performance of these SPSEs is alarming, with many entities unable to generate sufficient revenue to cover operational costs. The report specifically mentions the following enterprises:
- Assam State Transport Corporation (ASTC) – The corporation recorded continuous financial losses due to operational inefficiencies and procurement mismanagement. Revenue collection remains poor, with increasing reliance on government subsidies.
- Assam Power Distribution Company Limited (APDCL) – The company has been struggling with high transmission and distribution losses, inefficient billing mechanisms, and uncollected dues, significantly affecting its profitability.
- Assam Industrial Development Corporation (AIDC) – Despite receiving substantial state support, AIDC has failed to generate adequate revenue, with underutilized assets and inefficient project execution being key concerns.
- Assam State Warehousing Corporation (ASWC) – The enterprise has been flagged for poor asset utilization, lack of maintenance of warehouses, and high operational costs leading to financial distress.
Poor Governance and Policy Paralysis
One of the key findings of the report is the failure of corporate governance mechanisms in these enterprises. The audit points to a lack of proper oversight, accountability issues, and frequent policy reversals that have severely hampered their efficiency. Instances of delayed decision-making, bureaucratic red tape, and an absence of professional management have exacerbated the crisis.
A significant number of SPSEs have failed to comply with corporate governance norms, with many not even conducting regular audits or disclosing financial statements in a timely manner. The CAG report criticizes the state governments for failing to enforce stricter oversight on these entities.
Mismanagement and Financial Irregularities
The report exposes multiple cases of financial mismanagement, including unaccounted expenditures, misplaced investments, and irregularities in tender processes. Several SPSEs have also been found to have non-performing assets, further contributing to their deteriorating financial health.
- ASTC has been flagged for inefficient fleet management and unplanned vehicle procurement, leading to high maintenance costs.
- APDCL has struggled with high energy losses due to inadequate infrastructure investment and poor metering systems.
- AIDC has seen underperformance in industrial promotion projects, with funds being locked in non-viable ventures.
- ASWC has failed to modernize warehousing facilities, leading to underutilization and inefficiencies in operations.
Urgent Need for Reforms
The CAG has made several recommendations to address these pressing concerns. The report calls for a complete overhaul of the governance structure, better financial discipline, and a renewed focus on performance-based evaluation of these enterprises.
Key recommendations include:
- Implementing a stricter financial accountability framework.
- Ensuring professional management and reducing bureaucratic interference.
- Strengthening corporate governance by mandating regular audits and transparent financial disclosures.
- Exploring public-private partnerships to improve operational efficiency and financial sustainability.
The Road Ahead
The findings of the CAG report underscore the urgent need for reform in the management and oversight of SPSEs. If corrective measures are not taken immediately, these enterprises will continue to drain public resources while failing to deliver on their core objectives. State governments must act decisively to implement the CAG’s recommendations and restore public confidence in these enterprises.
With mounting losses and operational inefficiencies, the survival of many SPSEs remains in jeopardy. The need for accountability and transparency has never been more critical. As the report warns, without immediate and stringent reforms, these enterprises may soon become irredeemable liabilities for the state.