New Delhi: Loss incurring state PSUs have not only proved to be a burden on the state exchequer but have also been thriving on taxes paid by common people defeating the very purpose for which they were set up.

According to CAG report, almost all the state PSUs are flourishing on the assistance received from the state budget and subsidies.

Although majority of these PSUs have almost stopped working and are on the verge of closure, they cannot be shut down completely compelling the state government to continue them despite no output.

Every year, these units bag a hefty amount from the government, besides getting subsidies. Interestingly, the units enjoying the benefits of subsidy or budget are profit earning PSUs in the power sector.

For example, in 2008-09 the power sector of Uttar Pradesh got an assistance of Rs 3594.14 crore from the state budget which amounted to 70 percent of the total budget.

Similarly, in 2009-10 Rs1206.93 crore was released for the PSUs in Bihar which did not prove sufficient compelling the government to grant further subsidy to these units.

CAG report further reveals that there are 43 units in Uttar Pradesh alone which are on the verge of closure, but only 12 of them have received the legal order to shut down. The closure proceedings of 13 have yet not started.

In Bihar, there are 13 PSUs which can be closed, but are waiting for the government nod.

Meanwhile, condition of PSUs in Punjab is satisfactory. Although, the state had allocated Rs 3317.98 crore to these PSUs in 2009-10, the process to close down other units which are in a bad condition is also fastening.

The state government has already taken a final decision about eight PSUs out of nineteen which will soon be closed but the fate of seven is still uncertain.

(JPN/ Bureau)