PSU losses in HP
THE financial health of Himachal Pradesh’s public sector undertakings (PSUs) continues to deteriorate, with cumulative losses exceeding Rs 4,900 crore across 12 entities, as per the Comptroller and Auditor General’s (CAG) 2022-23 report. The Himachal Road Transport Corporation (HRTC) and Himachal Pradesh State Electricity Board (HPSEB) alone account for losses of Rs 3,500 crore. Their being in the red has been exacerbated by social welfare responsibilities like subsidised power and transportation. Successive governments have failed to address this crisis, burdened by entrenched inefficiencies and resistance to reforms. Chief Minister Sukhvinder Singh Sukhu’s push to merge loss-making PSUs offers a glimmer of hope. Other steps like withdrawing power subsidies for income tax payers and reducing free travel for certain groups also signal fiscal prudence.
Sukhu’s proposal to merge Agro Industries Corporation with the Horticulture Produce Marketing and Processing Corporation is a pragmatic start. Such mergers can reduce administrative overheads, streamline operations, and consolidate resources. But these efforts must address employee concerns through transparent dialogue, retraining programmes and assurances of job security as employee opposition remains a major roadblock to effective mergers. The adoption of modern management practices, such as digital transformation and efficiency audits, could curtail recurring losses. The HRTC could benefit from route optimisation and an upgraded fleet, while the HPSEB might reduce transmission losses by investing in renewable energy infrastructure. Governance reforms are equally critical. Appointing a capable leadership, setting performance benchmarks and fostering accountability at all levels can ensure long-term sustainability. Public-private partnerships could also unlock growth potential in sectors like tourism and horticulture.
With the state’s debt burden nearing Rs 90,000 crore, the need for decisive action has never been more urgent. While the road ahead is fraught with challenges, tackling this contentious issue may well determine HP’s economic stability in the long run.
