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Compliance Performance
Gujarat

Report of 2010 - Financial Audit on Commercial of Government of Gujarat

Date on which Report Tabled:
Wed 30 Mar, 2011
Date of sending the report to Government
Government Type
State
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Sector Transport & Infrastructure,Power & Energy,Industry and Commerce,Agriculture and Rural Development

Overview

Audit of Government companies is governed by Section 619 of the Companies Act, 1956. The accounts of Governmentcompanies are audited by Statutory Auditors appointed by CAG. These accounts  are also subject to supplementary audit conducted by CAG. Audit of  Statutory corporations  is  governed by their respective legislations. As  on 31 March 2010,  the State of Gujarat had 58 working PSUs (54 companies  and four  Statutory corporations) and 13 non-working PSUs  (all  companies). The working PSUs which employed 1.13 lakh employees, had registered a turnover of Rs. 58,451.76 crore for  2009-10 as  per  their  latest finalised accounts as on 30 September  2010. This  turnover was  equal to 15.34 percent of State  GDP  indicating an important  role  played by State PSUs in the State  economy.  The working PSUs  earned an overall aggregate profit of  Rs. 2,404.22 crore for  2009-10 and had aggregate  accumulated loss of  Rs. 262.16 crore.

As  on 31 March 2010, the investment (capital and long term loans) in 71 PSUs  was Rs. 60,396.37 crore. It grew by 46.42 per cent from Rs. 41,248.53 crore in 2004-05. The thrust of  PSU  investment  was  mainly in power  sector,  in which percentage share of investment increased from 26.87 in 2004-05 to 30.31 in 2009-10. The Government  contributed Rs. 8,078.91 crore towards  equity, loans  and grants/  subsidies to State  PSUs  during 2009-10.

During the year 2009-10, out of 58 working PSUs, 40 PSUs earned profit of Rs.2,672.93 crore and nine PSUs incurred loss of Rs. 268.71 crore. Major  contributors to the profit were Gujarat State  Petronet  Limited (Rs. 626.89  crore),Gujarat  Mineral Development Corporation Limited (Rs. 406.08 crore), Gujarat  State  Petroleum Corporation Limited (Rs. 403.02 crore)  and Gujarat
State Fertilizers and Chemicals  Limited (Rs. 389.12 crore).  The heavy losses were incurred by Gujarat  State  Financial Corporation (Rs. 129.38 crore)  and Gujarat State  Road Transport Corporation (Rs. 94.57 crore).Though the PSUs were earning profits, there were instances of various deficiencies in the functioning of PSUs. A review of three years Audit Reports of CAG shows that the State PSUs losses of Rs. 2,266.59 crore and infructuous investment of Rs. 317.90 crore were ontrollable with better management. Thus, there is tremendous scope to improve the functioning and enhance profits/ minimise losses. The PSUs can discharge their role efficiently only if they are financially self reliant. There is a need for greater professionalism and accountability in the functioning of PSUs.

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