Loss making public sector firms under scrutiny:42 PSUs report ₹29,000 cr loss, 21 lose net worth; audit flaws flagged

The Gujarat government has long projected itself as the country’s economic engine and a model of dynamic growth, frequently highlighting big claims around investment, infrastructure and industry. However, a report by the Comptroller and Auditor General (CAG) of India presents a contrasting picture behind these claims. It shows that several state-run enterprises and corporations are not only financially weak but are also reeling under heavy losses. PSUs in Gujarat incurred a net loss of ₹8,693.42 crore over the past five years An investigation by Divya Bhaskar has revealed that Gujarat’s Public Sector Undertakings (PSU) have incurred a net loss of ₹8,693.42 crore over the past five years. More alarming is that the cumulative losses of 42 undertakings have mounted to ₹29,279 crore. This indicates that these entities are not just running at a loss but have been financially hollowed out due to years of accumulated deficits. 21 government undertakings have completely eroded their net worth The situation is so severe that around 21 government undertakings have completely eroded their net worth, meaning they have lost even their core capital base. These include Gujarat State Financial Corporation, Gujarat Water Infrastructure, Gujarat State Road Transport Corporation, Diamond Research and Mercantile City Limited, GIFT Power Company and Land Development Corporation, among others. Why are government undertakings running into losses? The biggest reason is the imbalance between income and expenditure. Many companies have stopped their core operations—for instance, GSFC (Gujarat State Fertilizers and Chemicals) stopped issuing new loans after 2001. At the same time, delays in projects and rising costs have continued to push expenses up. When revenue dries up and costs keep rising, losses become inevitable. Is it just a management failure or a systemic issue? This is not merely a management problem but a systemic one. Losses of ₹8,885 crore in SSNNL, along with ₹128 crore in overpayments and ₹959 crore in claims, point to weaknesses in project planning, monitoring and governance. Are all companies facing the same problem? No, but the pattern is similar. GSRTC has been loss-making since 1973 as it also provides social services. Other companies are struggling due to project delays or flawed business models. What is the impact of hiding or not reporting data? This is the most serious issue. Several undertakings have not submitted financial data for the past two years. Official losses stand at Rs 29,279 crore, but without complete data, the actual situation could be worse. In the absence of data, accountability cannot be fixed, nor can corrective measures be planned. Why is the March-end spending spree risky? In 2024–25, 100% of expenditure under 124 heads was incurred in March alone. This suggests funds were not utilised throughout the year but rushed at the end to exhaust budgets. Such practices increase the risk of poor-quality work, haste and corruption, reflecting a major failure of financial discipline.