PSUs are routinely understating liabilities, overstating assets: CAG

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New Delhi: Even as the government termed the forgery of about Rs 10,000 crore in private technology services provider Satyam Computer Services as ‘an aberration’ on Thursday, a report by the Comptroller Auditor General of India points to significant irregularities in the accounts of its own companies, including NTPC, Bharat Heavy Electricals Ltd (Bhel), Mahanagar Telephone Nigam Ltd (MTNL) and Bharat Sanchar Nigam Ltd (BSNL).

“Satyam scam is an aberration and the events are specific to the company in question. No other scam of this nature has come to notice since then,” Corporate affairs minister Salman Khurshid told the Lok Sabha in written reply to a question.

However, three reports tabled in Parliament by the Comptroller & Auditor General of India (CAG) pointed out that the public sector enterprises are routinely understating liabilities, overstating assets to window-dress their accounts, apart from other misdemeanours in their financial reporting.

The CAG found several PSUs operating with

“managerial inefficiencies” anomalies like undue payment to employees, wasteful expenditure, non-compliance to law, idle investment and blocking of funds irregularities which added up to a whopping Rs 1,847 crore in just their 2007-08 accounts.

The report called ‘Financial Reporting by Public Sector Undertakings’ pointed out that thermal power producer NTPC had overstated profits by Rs 938.3 crore during 2007-08 while the assets were understated by Rs 26 crore. There was an understatement of liabilities to the tune of Rs 34 crore in the case of MTNL, while BSNL had overstated its assets by Rs 213 crore. Sick companies like HMT Watches and National Textiles Corporation (NTC), which depend on regular government assistance, were also found to have understated their losses. While HMT Watches understated its loss by around Rs 10 crore, NTC did it to the tune of Rs 203 crore. “These are indicative figures. We looked at 85 instances and have accordingly produced these figures. We are highlighting these cases not as the cases of losses but managerial inefficiencies. All efficient companies would preserve their revenues so that the overall turnover goes up,” CAG’s principal director Pramode K Mishra told reporters.