CAG criticizes the functioning of state PSUs in Bihar
Only 18 of 74 state PSUs in Bihar have finalized their accounts in the last three years and 65 of them have arrears in accounts from 1977-78 onwards, stated CAG report of FY2017-18. The CAG report tabled in the state legislature has cautioned that delay in finalization of accounts or their non-preparation is fraught with the risk of misrepresentation of facts, fraud, and misappropriation.
10 PSUs earned profit of Rs. 278.18 crore
As for the performance of those 18 PSUs, CAG report said 10 earned profit of Rs. 278.18cr, seven incurred a loss of Rs. 1437.93cr while the remaining one is a holding company working on "no profit, no loss" basis. These 18 PSUs generated an average negative return on investment of 6.14%, well below the average cost of borrowing at 8.49% during 2014-15 to 2016-17.
Loss to public-exchequer in 18 PSUs amounted to Rs. 1159.75cr
The loss to the public exchequer as a result of investment in these 18 PSUs amounted to Rs. 1,159.75cr. The loss by the remaining 56 PSUs couldn't be assessed owing to non-finalization of their accounts. Out of 30 working PSUs only nine had finalized their accounts for 2016-17. Also, the Bihar government had extended budgetary support of Rs. 4,476.54cr to 10 working PSUs.
Bihar-govt provided loan of Rs. 775.01cr to BSRTC during 2006-17
Lack of financial accountability in Bihar State Road Transport Corporation is "so serious that the CAG has refused to provide an opinion" on their accounts for 2003-04 to 2005-06 when finalized during May'14 to Sep'15. Bihar government provided loans of Rs. 775.01cr to the corporation during 2006-17. It has neither paid back the loan amount nor interest dues of Rs. 407.63 crore from 2010-11.
Total profit of BSEIDC increased significantly to Rs. 70.51 crore
The total profit of PSU, Bihar State Education Infrastructure Development Corporation (BSEIDC) increased significantly during 2012-13 to 2015-16 from Rs. 5.24cr to Rs. 70.51cr, but declined to Rs. 22.96cr in 2016-17 mainly because of slow execution of work. The corporation, however, failed to safeguard its financial interests by keeping its large surplus funds ranging from Rs. 293.84cr to Rs. 866.32cr in savings accounts.
BSEIDC suffered from poor planning
The BSEIDC also suffered from poor planning. It failed to include furniture and other essential amenities in the estimates of 297 model schools and construction could not be initiated in case of 71 model schools because of non-availability of land. As a result, the Model School Scheme failed in its entirety even after incurring an expenditure of Rs. 555.69cr.