The State Finances Audit Report of the Comptroller and Auditor General (CAG) has recommended that the state government review the performance of loss-making units – statutory corporations, government companies and cooperative banks and societies – which have produce little to no return on investment to a state that struggles to turn a surplus.
According to the report, which was laid in the Assembly yesterday, the Meghalaya government had invested Rs 2,638.43 crore in three statutory corporations (Rs 2,253.06 crore), eight government companies (Rs 272.67 crore) and 1,448 cooperative banks and societies (Rs 112.7 crore) as on March 31, 2019 but has little to show for it, having earned less than one percent as a return on investment during 2014-19.
The companies or corporations that have benefited from such investment included the Mawmluh-Cherra Cements Ltd, Meghalaya Energy Corporation Ltd and Meghalaya Industrial Development Corporation.
While earning a return on investment of a fraction of one percent, the government has been paying upwards of 6 percent on its borrowings as interest during 2014-19. Thus, the CAG report said that the government “should review the performance of the above units.”
It pointed out that the Meghalaya Fiscal Responsibility and Budget Management Act 2006 provides that the government should review the performance of public sector undertakings (PSUs), restructure those that are absolutely essential and close those that are no longer viable.