The State’s thrust of public sector investment was mainly on the power sector during the last five years, the Comptroller and Auditor General (CAG) of India has said.
The sector received investments of ₹15,231.94 crore (59.51%) out of the total ₹25,597.24 crore made during the period from 2013-14 to 2017-18.
The turnover of power sector undertakings has recorded continuous increase over the years. The increase in turnover ranged between 0.08% and 106.47% during 2013-18 whereas increase in Gross State Domestic Product (GSDP) of Kerala ranged between 9.56% and 10.71% during the same period, the CAG said.
Bigger than GSDP
The CAG report, tabled in the Assembly on Monday, has said the turnover of power sector undertakings recorded compounded annual growth of 25.08% during the last five years that was higher than the compounded annual growth of 10.21% of the GSDP. This resulted in increase in share of turnover of these undertakings to the GSDP from 1.09% in 2013-14 to 1.80% in 2017-18.
As on 31 March 2018, of the total investment in State PSUs, 99.73% was in working PSUs and the remaining 0.27% in non-working PSUs. This total investment consisted of 24.02% towards capital and 75.98% in long-term loans. The investment increased by 184.18% from ₹13,897.60 crore in 2013-14 to ₹39,494.84 crore in 2017-18.
The CAG has pointed out that PSUs are expected to yield reasonable return on investment made by the government. The amount of investment in the power sector PSUs as on 31 March 2018 was ₹19,469.84 crore consisting of ₹3,526.02 crore as equity and ₹15,943.82 crore as long-term loans. Out of this, the government has investment of ₹3,514.88 crore in two power sector PSUs in the form of equity. However, the State has not invested any amount in the power sector PSUs as long-term loans.
The loss incurred by these PSUs was ₹1,852.91 crore in 2017-18 against a profit of ₹147.57 crore earned in 2013-14. According to the latest finalised accounts of three PSUs, Kerala State Power and Infrastructure Finance Corporation Ltd. (₹5.97 crore) and KINESCO Power and Utilities Private Ltd. (₹1.54 crore) earned profit while Kerala State Electricity Board incurred a substantial loss (₹1,860.42 crore).
The return on investment of the power sector PSUs ranged between -8.78% to 9.34% during 2013-14 to 2016-17. However, it reduced to -52.55% during 2017-18 mainly owing to increase in finance cost and administrative expenses of KSEB.
The overall accumulated losses of two power sector companies were ₹4,933.31 crore as against the capital investment of ₹3,525.70 crore, resulting in negative net worth of ₹1,407.61 crore.
The loss of ₹325.58 crore incurred by working PSUs in 2013-14 increased to ₹1,589.51crore in 2017-18 owing to substantial increase in losses of Kerala State Road Transport Corporation (KSRTC). According to the latest finalised accounts of the 118 working State PSUs, 45 PSUs earned profit of ₹383.91 crore, 64 PSUs incurred loss of ₹1,973.42 crore, and one PSU had neither profit nor loss.