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Government companies cause Rs 3,000 crore loss to J&K administration within five years

Last Updated on January 17, 2021 at 8:21 pm

Government companies have had a long tradition of causing losses which ultimately governments have to pay with the amount which could be otherwise spent on developmental projects. Following this trend, companies managed by J&K government have costed more than Rs 3000 crores loss to the public purse.

In the past, J&K government had a collective investment of Rs 653.52 crore in various companies. This investment was divided into 24 Companies (Rs 279.76 crore), three Statutory Corporations (Rs 322.74 crore), eight Co-operative Institutions/ Local Bodies (Rs 37.83 crore), two Rural Banks (Rs 12.85 crore) and two Joint Stock Companies (Rs 0.34 crore).

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During financial years of 2013-14 and 2014-15, the dividend/interest receipt was Rs 128.88 crore. However, this interest decreased to Rs 54.13 crore in 2015-16, Rs 45.11 crore in 2016-17 and during the year 2017-18, government didn’t receive any amount. The return on total investment amount solely came from the Jammu and Kashmir Bank Limited, in which the Government holds 59.23 per cent equity.

During the year 2013-14, interest rate was 24.17 per cent and it consistently decreased during next years and there was no return in 2017-18, even though the investment during this time period increased from Rs 533.27 crore to Rs 653.52 crore. During last five years, State Government invested Rs 401.57 crore in 4 companies , 2 statutory Corporations and 2 Rural/Cooperative Banks. Out of all these investments, only two were able to make profit and remaining six incurred losses of Rs 3,153.29 crore.

During 2017-18, J&K government mainly invested in Corporations/Government Companies like:

  • The Jammu and Kashmir Financial Corporation (Rs 87.88 crore)
  • Jammu and Kashmir Road Transport Corporation (Rs 3.75 crore)
  • The Jammu and Kashmir Bank Limited (Rs 3.55 crore)
  • The Jammu and Kashmir Scheduled Castes, Scheduled Tribes and Backward Classes Development Corporation Ltd. (Rs 0.90 crore).

According to the latest finalized accounts, these Statutory Corporations/Government Companies lost:

  • The Jammu and Kashmir Financial Corporation (Rs 135.50 crore up to 2016-17)
  • Jammu and Kashmir Road Transport Corporation (Rs 1,148.11 crore up to 2013-14)
  • The Jammu and Kashmir Bank Limited (Rs 1,632.29 crore up to 2016-17)
  • The Jammu and Kashmir Scheduled Castes, Scheduled Tribes and Backward Classes Development Corporation Ltd. (Rs 5 crore up to 2001-02).

As on 31 March 2018, J&K government totally invested Rs 364.20 crore in above four PSUs/Government Companies which caused government losses of Rs 2,920.90 crore.

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All and all, J&K government’s investment in these companies has just caused losses to its treasury which is already dwindling.