Assam's Public Sector Enterprises Struggle Despite Significant Investment
Overview of Assam's Investment in Public Sector
A file image of Assam Legislative Assembly. (AT Photo)
Guwahati, May 25: In a concerning revelation, Assam has invested over Rs 10,903 crore into 31 State Public Sector Enterprises (SPSE), yet the returns from this substantial investment are alarmingly low, amounting to less than 1%. This finding is highlighted in the recent Audit Report on State Finances for 2024-25, presented to the state legislature this month by the Comptroller and Auditor General (CAG).
Among the 31 SPSEs, which include 27 government companies and four statutory corporations, only the Assam Power Generation Corporation Limited reported any profit, generating Rs 15 crore in 2024-25. This profit represents a mere 0.11% of the total capital invested. In contrast, the state government is incurring borrowing costs at an average interest rate of 6.76%, indicating that Assam is spending significantly more on debt servicing than its enterprises are earning.
The financial losses are substantial, with 17 out of the 27 government companies operating at a loss, accumulating a total of Rs 592.30 crore in losses. Additionally, three of the four statutory corporations are also facing financial difficulties, with combined losses of Rs 112.90 crore.
These findings emerge amidst a backdrop of economic growth, as Assam's Gross State Domestic Product (GSDP) has increased at an average rate of 18% annually from 2020-21 to 2024-25, reaching Rs 6,43,667 crore. Furthermore, capital expenditure has seen a remarkable rise, escalating from Rs 12,399 crore in 2020-21 to Rs 26,404 crore in 2024-25.
However, the CAG's report presents a stark contrast, illustrating a state that is aggressively borrowing to fund investments, while the enterprises benefiting from these investments yield minimal returns. With pension expenditures rising from 15.91% to 19.37% of revenue receipts and interest payments increasing from 8.01% to 9.77% over the past five years, the fiscal capacity to absorb these losses is diminishing.
The report has been forwarded to the Public Accounts Committee for further discussion and recommendations.