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.

Turnover

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

Profit
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

Losses
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.

Finances of State owned PSEs

This excel sheet contains the last available summary financial data of each of the state owned PSE as reported by CAG of India. This is compiled are released in public intrest for wider awareness of the finances of State government owned enterprises and facilitating a cross country comparison.

Here are some interesting facts from this compilation:

• Andhra Pradesh has the highest turnover for companies owned by it at Rs 36k crores as also the highest number of employees at 2.6 lakhs.
• Gujarat has almost the same revenue as Andhra Pradesh at 33k crores but with less than half the number of employees at 1.15 lakhs.
• Maximum revenue per employee is by Gujarat but Profit per employee is highest for Orissa at Rs 3.4 lakh.Profit margin for Oriya PSE is highest at 17% probably driven mainly by Mining and its Power companies.Remember that Orissa was the first state to introduce Electricity reforms.
  
• Power companies have the highest turnover with TNEB(Tamilandu) at top with Revenues of 14.5k crores.Beverage (read liquor) sector comes 2nd led by Beverage corporations of Andhra Pradesh and Karnatka at 6.7k crore and 6.38 crore respectively. Civil supply or PDS sector comes third with Tamilnadu at 4k crores and Punjab at 3.5 crores.
• Among individual companies, maximum number of employees are employed by MSEB(Maharashtra) at 1.16 lakhs which is much higher than 77k employedby TNEB with similar revenues. Remember that distribution of power is privatised in its largest city, Mumbai.Tthe process for privatisng in some other cities is going on.
• PSEB(Punjab) is the highest loss making company with losses of 1.6k crores rupees.17 of the top 18 highest loss making companies are in Power sector with next 5 from Transport sector.
• Ironically, the top 3 profit making companies are also from Power sector with MPSEB(MP) at 1.2k crores at the top followed by ~Rs 570 crores Gridco(Orissa) and GSECL(Gujarat) ~Rs 500 crores
  
• In transport sector, most of the states are making huge losses relative to revenues and few are just breaking even not surprisingly since the total turnover of the transport sector is only Rs 16k crores. Regional integration of transport sector is urgently called for but this is unlikel to happen since Transport sector is one of the biggest employers employing about 4.7 lakh people.Considering the vital role of public transport and the number of citizens it touches directly, overhaul of the sector is urgently called for. If we assume an average ticke price per trip per person of Rs 20, an average Indian must be making at least 8 trips per year by state transport buses alone.

How can BJP prove it is better?

The BJP came up with a wonderful IT vision which was a result of the hard work of few professionals at the eleventh hour. They also issued an infrastructure vision and a manifesto which was much better than Congress.
In retrospect, very few people took these seriously including,perhaps, BJP leadership. If BJP seriously believed in any such visions it would have worked harder on it and started mobilising public opinion on these issues much earlier and not dumped them as soon as the election got over which seems to be the case at present.
When the BJP states that 85 paise out of 1 Rupee disappear due to corruption,it is blaming itself as well because its not widely recognised that almost all central government schemes are implemented with the active cooperation of state governments.
The judiciary, Police,Education,Health and power sector come under the preview of states as well.But state governments are not considered worthy of critique by most of the commentators and let off to easily.

• When it comes to disinvestment, why does not best chief minister of India Narendra Modi let go of his state PSUs so well endorsed by his colleague Arun Shourie?
  
• why do not BJP ruled state privatise or at least corporatise transport corporations taking a cue from Banglore Transport corporation?
  
• I guess Electricity and Transport utility are chief among the loss making enterprises.Why not privatise the state electiricty generation/transmission and distribution and take the process initiated by BJP to its logical conclusion?
  
• What prevents BJP ruled states from reining in absentee school teachers and doctors?
  
• Why cant other BJP ruled states take a cue from Gujarat and start evening courts to reduce backlog of cases?
  
• Can any of the BJP ruled states claim that their Police departments are entirely professional and free from political interfernce?The recent initative of Shivraj Singh chauhan of organising Jan Sunvai with Police officers is a good initiative.
  
• Are the borders of BJP ruled states free from rent seeking behavior by Inspectors, why cant they follow the example of Gujarat of computerising the weighing of trucks?
  
• The BJP led state governments can still follow up on the promise of digitisation of government documents promised in their IT vision.
  

There seems to be an impression that only government is central government and public intellectuals have a task at hand here.