Check corruption in PSUs to stem losses

Yesterday, this paper had highlighted how the senior staff, depot managers and bus conductors were conniving and causing losses running into crores to the Maharashtra State Road Transport Corporation (MSRTC), and had also exposed alleged irregularities in a tender related to the auction of scrap.

These revelations belie the current dispensation’s claims of instituting credibility, accountability and transparency in governance. The loss-making MSRTC, it turns out, is no different from any of the other state corporations that are in the red as a result of weak institutional mechanisms to check prevalent corruption.

Recent reports by the Comptroller and Auditor General (CAG) have raised serious questions about the functioning of these corporations. The 2010-11 CAG audit report, for instance, had slammed state-run companies for incurring avoidable losses of Rs 2,160 crore. As many as 86 public sector undertakings (PSUs) and corporations were found giving undue benefits to private firms in the previous three years, resulting in huge losses.
This, the CAG clearly said, had led to a fiscal imbalance in state finances, in turn affecting the pace of infrastructure projects.

The latest revelations in the MSRTC scam clearly establish that the corporation’s net loss of Rs 645 crore in 2014-15 is also a result of deep-rooted corruption and a blatant disregard for financial propriety and prudence.

The administrative structure of such corporations, as it stands, inevitably leads to a conflict of interest and a perpetual power tussle between the parent ministry, its minister and the board of directors — a collective of representatives from government services and motley political parties.

In this backdrop, the government must now fully implement the recommendations of the Upasni Committee regarding loss-making corporations. One way to address the issue would be to restrict parent ministers from heading the corporations or limiting their involvement in the bid and tender processes. Maharashtra must urgently look to put in place a revival strategy for the corporations and strengthen their internal mechanisms if it wants to prevent more scams in PSUs.

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