The statements of FY23 are not available
C L Jose
THIRUVANANTHAPURAM/November 11-2023: Even as the governmental people are striving to paint a rosy picture about the performance of the state level public enterprises (SLPEs) by selectively highlighting the financial performance of these entities, a fact check reveals that the truth lies somewhere else.
Barring a handful of companies, most state-level public enterprises (SLPEs) have proved to be sheer money guzzlers, though may have helped provide employment to a few thousands.
While the aggregate profit earned by these companies for the financial year 2021-22 (FY22) amounted to Rs1570 crore, the aggregate loss reported by these SLPEs at Rs3,289 crore has dwarfed the profit, leaving the bottom line at a net loss to the tune of Rs1719 crore for FY22.
The statements of FY23 are not available as historically most of these companies fail to submit financial statements within the prescribed timeframe.
The aggregate loss could be even larger than what has been announced, as the Rs736.47 crore profit registered by KSEB Ltd for FY22 has been later downsized to just Rs97.66 crore following the objection raised by the Comptroller & and Audit General of India (CAG), thus bloating the aggregate loss by a further Rs638.81 crore to Rs2358 crore for FY22.
The losses accumulated by these SLPEs over the years have soared to Rs33,112.59 crore as of end-FY22, whereas the aggregate net worth of these 131 SLPEs has turned negative to the extent of Rs17,169 crore, meaning that not only their net share capital has been wiped out fully, but more seriously, it has gone negative to that extent.
Govt pays a price
And to run these 100 odd companies, the government is paying a high price by dipping into its kitty every year. While the combined paid up capital of these companies is at Rs21,709 crore, the financial investments made into these companies hitherto have been computed at Rs62,262 crore as of FY22.
The budgetary support to these SLPEs from the government for FY22 alone comes to about Rs1030 crore, whereas the subsidies/grants received by these entities from the Kerala Government during 2021-22 was at Rs1,753 crore, far less than that received in the previous year at Rs4570 crore.
Beverages Corporation handout goes ‘high’
The SLPEs have contributed Rs13,032 crore to state exchequer is a bit misleading as 97.50 per cent of this at Rs12,705 crore has come from a single entity, Kerala State Beverages (M&M) Corporation Ltd.
While Beverages Corporation contributed a huge amount as sales tax to the Stat government, the Corporation could churn out only Rs16.71 crore as profit for FY22.
More importantly, Beverages Corporation had reported a net loss of Rs289.33 crore for 2020-21 (FY21) and a loss of Rs86.32 crore for the previous year (FY20).
Why Corporation struggles for profit?
Why the Beverages Corporation that hands out thousands of crores year after year to the state exchequer fails to earn any meaningful profit for its own sake is what baffles the market.
There’s a catch here. If the profit looks large, it attracts a larger corporate tax whose larger chunk will inevitably go to the Centre.
What the state has done here is instead of increasing the price and book higher profit on its products, the Corporation kept the profit margin very low and slapped a huge sales tax to the tune of 251 per cent.
