Little profit from PSUs despite huge investment

NEW DELHI: The government has invested Rs 4,27,102 crore in the past three years in public sector units (PSUs), according to official data. The government spend on PSUs was Rs 1,34,766 crore in ’05-06, Rs 1,44,279 crore in ’04-05 and Rs 1,48,067 crore in ’03-04.

However, profit made by central public sector undertakings stood at Rs 74,432 crore in ’04-05, which is almost half of the funds invested by the government in these PSUs.

Out of a total of 243 state-owned companies, only 143 made profit. Of these too, a majority made only marginal profits. PSUs made a total loss of Rs 9,000 crore approximately in ’04-05. Most of the 73 PSUs are chronically loss-making units, according to government officials.

So far, the case of about 40 sick PSUs has been taken up by the Board for Reconstruction of Public Sector Enterprises, with the government clearing revival plans of 15 units and the closure of one PSU. The government is also seeking a joint venture partner for Tungabhadra Steel, another sick PSU. With a large number of social sector programmes waiting for funds and attention, the government seems to be high on spending where return on investments continues to
be dismally low.