Non-performing public sector undertakings (PSUs) in Uttar Pradesh, mounting arrears and gross anomalies in the power sector are bleeding the state’s coffers dry, the Comptroller and Auditor General (CAG) has pointed out. A report by the country’s top audit body, tabled in the just-concluded session of the Assembly, shows the tardy performance of the state’s PSUs. It says that out of 65 working PSUs, 24 incurred loss of Rs 18,497.43 crore, while 33 earned profit of Rs 707.52 crore. There was no mention of the remaining units. The CAG noted in its report for 2015-16 that out of 38 non-working PSUs, 12 were in the process of liquidation and the rest had 422 accounts in arrears for one to 33 years.
The CAG pulled up the state government for not placing in the state legislature separate audit reports of accounts of half a dozen corporations for the past few years. “This weakens the legislative control over statutory corporations and dilutes the latter’s financial accountability,” it said in its 195-page report on PSUs in Uttar Pradesh.
In its major audit findings, the CAG said that due to non-completion of projects within the stipulated period, the chances of conversion of loan of Rs 4,110.70 crore under the Re-structured Accelerated Power Development and Reforms Programme (R-APDRP) into grant of Rs 2,332.58 crore “looks remote”.
Losses on account of billing and collection efficiency of power discoms, too, have increased considerably. The Madhyanchal Vidyut Vitran Nigam Limited (MVVNL) failed to offer the work to turnkey contractor within the validity period of rates, resulting in extra-financial burden of Rs 134.33 crore on the scheme, it said.
An audit on the metering system in Dakshinanchal Vidyut Vitran Nigam Limited (DVVNL) showed that the number of unmetered connections increased from 10.67 lakh as on March 2012 to 12.98 lakh as on March 2016, though the UP Electricity Supply Code provides that no new connection shall be released without installation of meter.
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It also noted that DVVNL suffered loss of Rs 6.08 crore due to the procurement of meters at higher rates, award of works at higher rates and excess payment to meter reading and bill generation contractor. The CAG rapped the state government for not making concerted efforts till 2013 for the revival of the Uttar Pradesh Financial Corporation although its financial position had deteriorated in 2007.
“The corporation forwarded a revival package to the state government only after a period of more than six years, which was pending before the government as of March 2016,” the report said. It also said that the process for recovery of dues was not followed diligently by the corporation as a result of which only Rs 1.17 crore of the total Rs 83.45 crore dues could be recovered.
On the performance of the Uttar Pradesh State Road Transport Corporation, it said the state government neither drew any plan nor took any action for the expansion of operations. “The corporation did not frame action plan for timely recovery of dues. Due to this, outstanding dues of only Rs 46.58 crore could be recovered against total dues of Rs 83.02 crore pending,” it said.
The corporation also “failed to bring up” public-private- partnership projects for tapping revenue sources other than traffic revenue. The state government “neither formulated any state transport policy on the lines of the national transport policy nor took any initiative to do so”, the report said.