BENGALURU: Twenty-eight public sector undertakings run by the state government collectively suffered losses of Rs 1,374 crore in the period 2018-19, according to a report by the Comptroller and Auditor General (CAG). Just two entities — Karnataka Neeravari Nigam Limited (KNNL) and Bangalore Metropolitan Transport Corporation (BMTC) — accounted for 68 per cent of this figure.
Overall, the report, which was tabled in the assembly on Wednesday, analysed 103 Karnataka PSUs. Of these, 90 companies are functional, with 49 reporting profits totalling Rs 875 crore for the financial year 2018-19. CAG has noted among the functional PSUs, KNNL incurred the maximum losses — Rs 719.6 crore. BMTC took a hit of Rs 217.1 crore.
Some business experts say that the tendency of PSUs to provide a public service without efficiency is proving to be costly for them. But KNNL managing director Mallikarjun S Gunge said that the CAG report cannot be taken at face value. “We cannot consider the numbers claimed by CAG as a loss since KNNL is a service-oriented company. We are in the business of providing a service to farmers and this cannot be measured in terms of profit or loss,” he said.
Gunge added that KNNL had the mandate of collecting cess from farmers, but this was not possible in most cases. BMTC managing director C Shikha said that state-run transport corporations could not be expected to earn a profit with a business model focused on public service. “BMTC is facing severe competition from private transporters, autos, Ola and Uber, apart from private vehicles. With such being the case, we are dependent on the state government,” she said.
Shikha added that BMTC was trying to reduce losses by increasing Vayu Vajra services (AC buses) that cater to IT employees and airport passengers and acquiring 90 electric feeder buses for last-mile connectivity with Namma Metro.
The transport corporation claims it is also using technology and apps to draw more commuters. “But the fact remains that we will continue to depend on the government as it is not only embedded in our operations but also manages external factors like subsidised transportation for large sections of society, including students and garment workers,” Shikha said.
In a silver lining for the government, some PSUs are in the green. Karnataka Rural Infrastructure Development Limited and Karnataka Soaps & Detergents Limited made profits of Rs 126.2 crore and Rs 109.4 crore, respectively, during the said period.