Haryana Chief Minister Manohar Lal releasing second part of white paper on state finances at Chandigarh on Saturday. Finance Minister Capt. Abhimanyu is also seen in the picture.
New Delhi, March 7, 2015: Skewed focus by HUDA, HRDF and other developmental institutions resulting in imbalanced development of the state, outstanding dues not having been recovered by HUDA and HSIIDC; assets of Public Sector Undertakings (PSUs) being allowed to degenerate into liabilities; and funds available with Infrastructure Development Fund (IDF) not being spent on development have marked the ten-year rule of the previous Haryana Government.
Gross mismanagement of resources and growth of a few selected districts at the cost of many others, highlighted by Part 1 of the White Paper released on March 2, is underscored by Part 2 of the White Paper too which focuses on PSUs. It also turns the scanner on cooperative banks, urban local bodies and such off-budget resource centres as the Marketing Board, HRDF, Infrastructure Development Fund; and Building and other Construction Workers Welfare Cess .
Releasing Part 2 of the White Paper Chandigarh today, the Chief Minister, Manohar Lal Khattar said, “Facts and figures do not lie. The fact of skewed development has been underlined again. But let me reassure you that we stand committed to balanced growth of all parts of the state without any favouritism or discrimination.”
He reiterated that the objective of the white paper was not to blame anyone. “We wanted to feel the financial pulse of the PSUs and other bodies, diagnose what ails them; so as to carryout course correction after taking inputs from financial experts, academics and political outfits. One thing is certain. We want the precious assets of the state to play a vital role in putting the entire state in a high-growth orbit,” he added.
Part 2 of the White Paper points out how assets were allowed to rust and turn into liabilities during the last ten years in Haryana. Ailing and impoverished, most of the PSUs are suffering for want of autonomy and out-of-the-box thinking. While many a Corporation has not been run in corporate style, most undertakings have been allowed to go under and funds with others went a begging for want of development plans. Off -budget institutions were made to favour some districts in matters of development, the Chief Minister said.
Referring to HUDA, the Chief Minister pointed out that the Authority generated resources, including External Development Charges (EDC), of Rs 32,039 crore between 2004-05 to 2013-14, against which the expenditure on land acquisition and development works aggregated Rs 29,051 crore. During this period, HUDA paid income tax to the tune of Rs. 3,488 crore on its turnover rather on its profit, due to non-compliance of accounting standards.
Strangely, EDC to the tune of Rs 11,048 crore as on 31.12.2014 is yet be collected. The amount was overdue and outstanding against the licences granted by the Department of Town & Country Planning in various Urban Estates in Haryana, which was not collected from the licensees. Of course, out of this amount, Rs 2909 crore is under stay order from the courts.
A close look at the district-wise resources collected by HUDA during the period under reference and the corresponding funds allocated to these districts for works reveals that some districts like Rohtak, Panchkula, Rewari and Ambala received far more funds than were collected from these districts. A staggering sum of Rs 5,525 crore more was spent in these districts, while Gurgaon received Rs. 7,527 crore less than the resources generated from there. This indicates a skewed focus on some districts at the cost of others Haryana during the last ten years.
What’s more, during this period, 4,646.58 acres of land was released from the process of acquisition of which 2,602.58 acres of land was released in the three districts of Gurgaon, Sonipat and Rohtak. “All this calls for course correction and we shall do so after getting the inputs from all stakeholders”, the Chief Minister added.
Haryana has as many as 43 PSUs, 19 each set up under the Companies Act, 1956, and the Cooperative Societies Act, 1984, and the remaining five created under special statutes. Needless to emphasise, these required flexibility of action usually not available to Government departments to take forward the development agenda through faster decision-making, raises resources and spending them effectively to achieve the objectives they were set up for.” But hopes of people have been belied and their expectations have not been met,” the Chief Minister remarked.
Referring to the four PSUs in the power sector, Manohar Lal said that three--HPGCL, UHBVNL and DHBVNL—were in losses. In the industrial sector, two out of four--Haryana Minerals Ltd (HML) and Haryana CONCAST Ltd (HCL) were closed down but not yet wound up; Also a decision had been taken to bring the curtains down on the Haryana Financial Corporation which was not able to live up to its mandate to finance industrial units.
In case of HSIIDC The non-performing assets (NPAs), ruling at 21.36 per cent, are on the higher side and a cause of serious concern. What’s more, the Corporation had outstanding dues to the tune of Rs 565 crore to be recovered from the allottees on March 31, 2014. These issues need to be addressed.
The Chief Minister said that the health of the four PSUs in the agriculture sector is also not good. While the turn-over of two—Haryana Agro-Industries Corporation and Haryana Ware Housing Corporation zoomed four-fold between 2004-05 and 2013-14, this profit either declined or did not keep pace with the rising turn-over. While the turn-over of HAIC increased from Rs 617.12 crore in 2004-05 to Rs 2,654.88 crore in 2013-14, its profit dipped to Rs 0.68 crore from Rs 21.08 crore. And in case of the latter, the turn-over soared to Rs 2,630.76 crore from Rs 794.61 crore but the profit registered only a marginal increase from Rs 239.25 crore to Rs 259.85 crore.
Coming to the cooperative sector, the Chief Minister said that out of the eight public sector enterprises, three—Sugarfed, Confed and Housefed--are in losses, and the profit of another (HARCO BANK) is heading south. Sugarfed has ten co-operative sugar mills all of which except Shahabad, are incurring losses.
Their cumulative losses of Rs 378.88 crore in 2004-05 swelled to Rs.1,095.85 crore in 2013-14. The irony is that their happened despite the two waivers granted by the state government: one of Rs 190 crore in 2006-07, and another of Rs 7 crore in 2009-10. Non-Performing Assets (NPAs) of the HARCO Bank have ranged between 0.02 per cent and 0.07 per cent whereas the NPAs of Central Cooperative Banks (CCBs) shot up from 5.16 per cent in 2004-05 to 6.19 per cent in 2013-14.
Even on the recovery front, the road is slippery. The recovery percentage of the CCBs which averaged 80.38 in 2004-05, declined to 70.72 in 2013-14. So far as HARCO Bank and Central Cooperative Banks are concerned, the past decade was massed by a decline in the recovery of loans by CCBs and higher NPAs which is matter of grave concern, the Chief Minister said.
Not that things are any better in the social sector. All the three public sector enterprises --Haryana Scheduled Caste Finance & Development Corporation, Haryana Backward Classes and Economically Weaker Sections Kalyan Nigam and the Haryana Women Development Corporation—are in fading financial health with losses mounting by the day. This has incapacitated them to live up to their mandate. The cooperative financial sector leaves a lot to be desired and betrays lack of suitable policy initiatives to arrest the declining trend. Besides, Haryana State Cooperative Agriculture Rural Development Bank Ltd. (HSCARDB), there are 19 District Primary Cooperative Agricultural Rural Development Banks (DPCARDBs). Prior to 2004-05, the bank advanced loans at an average rate of Rs 300 crore per year. But thereafter, both the lending as well as recovery has been on the decline. The cumulative losses of the bank increased from Rs.2.32 crore in 2004-05 to Rs. 60 crore in 2013-14.
Similarly the cumulative losses of the DPCARDBs increased from Rs.223.20 crore in 2004-05 to Rs.915.99 crore in 2013-14. The recoveries too fell. / (SK Vyas/Jalandhar)