Sunday, September 13, 2009

Finances of States owned PSEs: Power Sector

The consolidated excel sheet has been updated after cleaning and correcting the data in some places.The summary stats for Power sector are here.This post will focus on Power sector.(All numbers are approximate with less significant digits omitted)

Aggregate Data
  1. This sector has a turnover of 1.9 lakh crores and employs 7.7 lakh persons. The total accumulated losses for the sector are Rs 32k crores.The turnover per employee is hence Rs 22 lakh. There is a wide variation around this figure with Orissa at the top with Rs 55lakhs in contrast to Rs 6.8 lakhs for Bihar.
  2. The two industrial states of Gujarat and Maharashtra have the highest revenue at about Rs 27k crores and 20k crores respectively. Maharashtra has double the number of employees(1.16lakh) of Gujarat(56k).This is clearly reflected in their profitability with Gujarat having a profit of 628 crores(2nd highest in the country) in contrast to Maharshtra's 117 crores.
  3. UP comes third with a turnover of Rs 20k crores whose manpower is not completely reported, followed by AP at Rs 18k crores.UP has the distinction of having highest losses and highest accumulated losses at about 2.6k crores and 11k crores respectively.
  4. Karntaka and TamilNadu come next with revenue of about 14k crores each.While Karnatka employs 42 thousand; TamilNadu employs almost twice that(78k) .No wonder, Karnatka is making a profit of Rs 462 crores while TN is making a loss of Rs 1328 crores.
  5. Further down the list, Haryana has a revenue of 13k crores with an employee base of 33k while next door Punjab earns about half that(Rs 7k crores) with more than double the number of employees (73k ). Punjab's revenue per employee of Rs 9.5 lakhs is only beaten by Bihar(Rs 6.8 lakhs) and Himachal Pradesh (Rs8.6 lakh) . But even than, their percentage losses at 8% and 1% are much less than Punjab's 23%.Hence,Electricity reforms in Punjab are inevitable; despite this.
  6. The two mineral rich states of Orissa and Chhatisgarh have the highest profit margins of 19% and 10% respectively with Kerala coming a distant third at 5%.However,there is considerable scope for the latter two states to cut the flab having Revenue per employee of only Rs 17 lakhs and Rs 24 lakhs respectively in contrast to Orissa's Rs55lakhs.

Company level data
There are total 93 companies in power sector 14 of which have not reported any accounts.

  1. There are 46 companies with revenues of more than Rs 1kcrore aggregating to 1.77lakh crores
  2. There are 32 companies with revenues of more than 2kcrore aggregating to 1.56lakh crores
  3. There are 14 companies with revenues of more than 4kcrores aggregating to 1.05lakh crores
  4. There are 4 companies with revenues of more than 10kcrores aggregating to 50kcrores
There are total 41 companies that are profitable earning a total of 5128crore rupees. Of these:
  1. 14 companies earn more than 100crores totalling 4516crores
  2. 8 companies earn more than 200crores totalling 3616crores
  3. 3 companies earn more than 500crores totalling 2317crores
There are total 33 loss making companies making total losses of Rs 8044 crore.UP alone accounts for 1/3rd of these losses with Punjab and TamilNadu accounting for another 1/3rd.
  1. 19 companies are making losses of more than Rs 50 crores totalling 7707 crores
  2. 16 companies are making losses of more than Rs 200 crores totalling 7397 crores
  3. 10 companies are making losses of more than Rs300 crores totalling 5934 crores
  4. 3 companies are making losses of more than Rs3546 crores totalling 3546 crores
This short summary clearly demonstrates that some states have just too many employees and they are a serious roadblock to reforms of this sector.The 6th pay commission is only going to aggravate the situation.Just to put things in perspective,revenue per employee of private sector Tata Power Company at more than Rs1.5 crores is more than triple that of best performer of state owned Power companies. For worst performers like Punjab,Bihar and Himachal this figure is ranges from 15 to 25 times. This, simply, is not sustainable.