Kerala PSU industries return to profit after 7 years

 Govt committed to pursue proactive steps to improve performance

THIRUVANANTHAPURAM: After a gap of seven years the industries under the state public sector undertakings (PSUs) have returned to profitability posting an aggregate net income of Rs104 crore for the just closed financial year ending March 31, 2018 against an aggregate net loss of Rs80.67 crore for the comparable previous year.

It was in 2010, the PSU industries had last tasted profit. The overall loss of Rs131.86 crores in 2015-16 was initially reduced to Rs.80.67 crores during 2016-17 before achieving this unprecedented feat.

However, for the PSUs as a whole to achieve this would be a daunting task at least in the near term due to the presence of large loss-making PSUs, especially in the utility segment – the likes of Kerala State Road Transport Corporation (KSRTC), Kerala State Electricity Board Ltd (KSEBL), Kerala Water Authority (KWA), etc – the clear elephants in the room.

There are 42 public sector industrial units under the Industries Department of the Government of Kerala, classified under nine sectors with textiles, chemicals, engineering and traditional industries dominating them.

Responding to on the turnaround of industries in Kerala, Dr MP Sukumaran Nair, Chairman, Public Sector Restructuring & Audit Board (RIAB), Government of Kerala, said the achievement this time was against many odds.

“The global recession and the consequent internal recession in the industrial sector, the unfriendly policies of the central government towards public sector industries, volatile Indian commodities market engendered by the liberalised import policy, demonetization, GST, etc, were factors that worked against us,” he added.

According to Dr Nair, the weakest element in the development of state PSUs was the managements, which wholly lacked professionalism and accountability. Also, there were serious constraints in getting capable and experienced people to fill such posts.

“Lack of credibility, fear of excessive external interference and unattractive remuneration were some of the reasons why competent professionals were reluctant to take up challenging assignments with PSUs,” he said adding that through a very transparent selection process involving a high profile board of interviewers, the government has been able to identify and post chief executives to head these units.

Dr Nair explained that based on a complete review of present operations of each of the units, RIAB worked out detailed proposals for modernization/ diversification of existing operations for future growth and development. These proposals included in the development plan for a five-year period with specific components for each year from 2016 onwards.

Based on detailed review of performance of PSUs, the Government increased the budgetary allocation from Rs123 crore during 2016-17 to Rs283 crore during 2017-18 for modernization, expansion and revival initiatives in PSUs.

The RIAB chief pointed out that during the 13th Five Year plan, more thrust will be given for technology upgradation, modernization /expansion of manufacturing activities in PSUs.

Proposals worth Rs8,000 crore were submitted to State Planning Board for the 13th Five-year plan period for the revival and rejuvenation of PSUs. He said based on the recommendations of P.Nandakumar Committee, which comprehensively studied the issues in the textile sector, a complete restructuring of spinning mills under the public and co-operative sectors incurring an

expenditure of Rs495 crore has been adopted and the activities are to start from the next financial year.


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