There are 34 state-run public sector enterprises (PSE) whose net worth is "completely eroded" due to accumulated losses, the Comptroller & Auditor General (CAG) said in its report tabled in the Karnataka Assembly on Tuesday.
The net worth of 34 PSEs is "either zero or negative", the CAG said in its State Finance Audit Report for the financial year ended March 2022.
The 34 PSEs include four Escoms (Bescom, Hescom, CESC and Gescom), four transport utilities (KSRTC, BMTC, NWKRTC and KKRTC), Lidkar, MySugar, Karnataka Pulpwood Limited, KSTDC among others.
Karnataka has 125 PSEs - six statutory corporations and 119 government companies (including 13 that are inactive).
According to the CAG report, as on March 2022, there were 54 PSEs with accumulated losses of Rs 37,893.24 crore as per their latest finalised accounts. Two of them - Karnataka State Veneers Ltd and Mysore Cosmetics Ltd - were under liquidation, the report pointed out.
Of the 54 companies, the net worth of 34 PSEs was (-) Rs 17,912.56 crore against equity investment of Rs 9,095.51 crore.
"In 26 out of 34 PSEs whose capital had been eroded, government loans outstanding as on March 2022 amounted to Rs 42,567.68 crore," the audit found.
The CAG also pointed out that the 13 inactive government companies have an investment of Rs 607.78 crore towards capital (Rs 160.21 crore) and long-term loans (Rs 447.57 crore). "This is a critical area as the investments in active PSUs do not contribute to the economic growth of the state," the CAG said.
The number of profit-making PSEs was 55 in 2021-22, up from 50 in the year before that. However, the profit earned decreased to Rs 2,608.22 crore in 2021-22 from Rs 2,987 crore in 2020-21, the report said.
The CAG found that PSEs are not adhering to the prescribed timeline on submitting their financial statements as per the Companies Act. "As a result, 204 accounts of 86 government companies were in arrears. Also, six accounts of four statutory corporations were in arrears," it said.