Only 18 out of 79 state public sector undertakings (PSUs), including nine from the power sector, in Bihar have finalised their accounts in the last three years. Seventy-five of them have 1,321 arrear accounts since 1977-78, according to the Comptroller and Auditor General (CAG) of India report for the year ending March 31, 2019. The report was tabled in the Bihar legislative assembly on Thursday.
According to a mandatory provision under Bihar Finance Rules, companies have to finalise their accounts at the end of the fiscal so that they can be audited. If a company has not done so for 20 years, it is said to have 20 arrear (outstanding dues) accounts.
The CAG, as per due process, reports all discrepancies to the departments concerned and seeks explanations. If unconvinced with the explanations, CAG details its objections in its annual report. The report will now be referred to the Public Accounts Committee of Vidhan Sabha.
“The state government’s total investment in the 79 PSUs was ₹44,922.71 crore, with the bulk– ₹40,473.20 crore–in the power sector. Of the 18 PSUs that finalised their accounts up to 2018-19, 10 earned a profit of ₹310 crore, while seven incurred losses of ₹2,778.54 crore, with the overall loss of the 18 PSUs totalling ₹2,467.56 crore in 2017-19,” says the report, which was explained by principal accountant general (PAG) Ramavatar Sharma at his office.
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The report said that audited final accounts of the Bihar State Food and Civil Supplies Corporation Limited had arrears since 2003-04, which prevented the company from receiving food subsidy of ₹212.50 crore. “The delay in finalisation of accounts may result in risk of fraud and leakage of public money, apart from violation of the provisions of the relevant statutes. As on March 31, 2018, ₹773.44 crore had been invested in 42 state PSUs for over five years. While the Bihar government has already decided to wind up 31 of them, no action has been taken against the remaining 11 companies,” it added.
According to the report, though the Bihar government provided ₹197.93 crore as subsidy to the Bihar State Sugar Corporation Limited for payment of wages etc. during the last three years, the company did not finalise its accounts for the last 34 years. “Several non-functional companies have had arrear accounts for 42 years (since their inception). The shortcomings regarding accounts of Bihar State Hydroelectric Power Corporation Limited from 2006-07 to 2009-10, South Bihar Power Distribution Company Limited and North Bihar Power Distribution Company Limited for 2017-18, Bihar State Food and Civil Supplies Corporation Limited from 1999-2000 to 2002-03 are so serious that CAG declines to give an opinion,” the report said.
The CAG report also highlighted how the Bihar Rajya Pul Nirman Nigam Limited paid its contractors ₹66.25 crore prior to technical sanction, ₹4.08 crore to design consultants without execution of agreement and appointed a supervision consultant on a nomination basis without recording full justification for single-source selection in violation of the Bihar Finance Rules, 2005. “The agency charge on non-admissible items by the Bihar State Road Development Corporation Limited also led to a burden of ₹61.73 crore on the state exchequer. The company also lost ₹1.34 crore by not organising its investments to avail higher interest rates on fixed deposits,” said the report.
Govt redeems own land
The report underlined how the transport department recovered the entire outstanding loan (principal) of ₹874.81 crore from the Bihar State Road Transport Corporation (BSRTC) by taking over its physical property, including some land valued at ₹615.60 crore, which was already owned by the Bihar government–a misrepresentation of facts. BSRTC was given a loan at the rate of 13% per annum, while the average cost of borrowed funds for the government ranged between 6% – 10%, to pay wages and emoluments to its retired/deceased employees by the order of the Supreme Court and high court.
