Injudicious investments by Haryana into state-owned companies including power utilities have fetched far less returns to the exchequer than what it pays on borrowings for making these investments the Comptroller and Auditor General of India has said in a report.
In the report for the year 2010-11 tabled in Haryana Assembly the government auditor asked the state government to desist from investing its high-cost borrowings and even suggested to divest its stake from loss-making companies.
"The government not only needs to invest its high-cost borrowing more judiciously to get better returns but also should consider disinvestment in loss making units " the report said.
Highlighting the poor returns on investments in government companies, the report disclosed that the government earned return from investments ranging between 0.04 per cent and 0.18 per cent during 2006 till 2011 against paying an average rate of interest of 7.43 per cent to 9.29 per cent on borrowings in the same period.
Though state's investments in corporations, rural banks, joint stock companies and cooperatives went up by 109 per cent from Rs 3,085 crore in 2006-07 to Rs 6,376 crore in 2010-11 the actual returns on these investments plummeted from Rs 5.62 crore in 2006-07 to Rs 2.48 crore, report said.
Eleven government owned companies with an aggregate investment of Rs 5,776 crore were incurring losses and their accumulated losses amounted to Rs 6,170 crore up to 2010-11. Significantly losses of power utilities Uttar Haryana Bijli Vitran (UHBVN), Dakshin Haryana Bijli Vitran (DHBVN), Haryana Power Generation and Haryana Vidhyut Prasaran Nigam accounted for 93 per cent of total losses of Rs 6,170 crore.
Losses were attributed to deficiencies in financial management planning project implementation operation and monitoring, CAG observed. Despite Thirteenth Finance Commission asking state government to prepare a roadmap for closure disinvestment and privatisation of loss making PSUs no step in this direction was taken by the state government, report said.
There are seven PSUs including Haryana State Minor Irrigation, Haryana State Housing Finance, Haryana Concast, Haryana Tanneries, Haryana State Small Industries and Export Haryana State Handloom and Handicrafts and Haryana Minerals which are non-operational.
Out of these two PSUs, Haryana State Housing Finance and Haryana Concast have been closed down but their liquidation process has not started.