Accumulation of huge losses by eight out of 20 working State Public Sector Enterprises (SPSEs) has eroded public wealth.
According to the Comptroller and Auditor General (CAG) in its State Finance Report 2021-22 for Meghalaya, the state-owned firms have accumulated losses of Rs 3,269.31 crore and had completely eroded their paid-up capital of Rs 1,162.48 crore.
These are the Meghalaya Power Distribution Corporation Limited (MePDCL), Meghalaya Cherra Cements Limited (MCCL), Meghalaya Transport Corporation Limited (MTC), Meghalaya Tourism Development Corporation Limited (MTDC), Meghalaya Handloom & Handicrafts Development Corporation Limited (MHHDC), Meghalaya Government Construction Corporation Ltd. (MGCCL), Meghalaya Infrastructure Development and Financial Corporation Ltd. (MIDFCL) and Meghalaya Minerals Development Corporation Ltd. (MMDCL).
“This is a cause of concern and the State Government needs to either improve the functioning of these SPSEs or take a decision on continuing their operations,” the report observed.
The CAG also said that the average return on investment in State PSEs was less than one per cent during 2017-22. “Government however, paid interest on its borrowings at an average rate of interest of 6.40 per cent to 6.85 per cent during 2017-22.
The report said the State government should review the performance of these PSEs as laid down in the Meghalaya Fiscal Responsibility & Budget Management Act, 2006. The act provides for a performance review including restructuring of those that are absolutely essential and closing those which are no longer viable.
The issue to revive the MCCL also came up during the just concluded budget session of the assembly. The opposition Voice of the People Party (VPP) flayed the State government for its failure to protect the interest of its own public sector undertakings such as MCCL and others.
Chief Minister Conrad Sangma had said that the government could not revive the MCCL despite having invested over Rs 350 crore. Rs 100 crore was infused during the last five years to take care of the salaries and dues of the MCCL and that Rs 11 crore was infused in 2022-23, Rs 30 crore in 2021-22, Rs 6 crore in 2020-21 and Rs 35 crore in 2018-19.
Sangma said joint venture is part of the three options that the government is examining and the other two are for the government to continue to invest in the MCCL or to close it down.
