Date:22/01/2005 URL: http://www.thehindubusinessline.com/2005/01/22/stories/2005012200931500.htm

Back Divest loss-making Kerala PSEs: Chamber

Our Bureau

Kochi , Jan. 21

THE Kerala Chamber of Commerce and Industry has urged the State Government to initiate efforts to privatise public sector undertakings in the State, considering the huge accumulated losses incurred by various PSEs.

Participating in a pre-budget discussion with the State Finance Minister, the Chamber President, Mr C.P. Jain, pointed out that the accumulated losses of 111 PSE's in the State was Rs 4,000 crore.

Most of these units were established without any purpose and sometimes even to favour politicians.

There should be a political will to privatise PSEs, the Chamber President said and appealed the Government to withdraw from the non-core and non-strategic areas.

He said that continued disinvestments in the public sector undertakings to generate adequate funds for the repayment of public debts would reduce the interest burden.

It is to be noted that the tax structure in Kerala is the highest in the country but the per capita debt is higher than the neighbouring States, he added.

The Chamber urged the Government to constitute sales tax advisory prior to the introduction of VAT from April 1. Though the UDF Government notified the formation of advisory committee twice, it has not been constituted so far.

The setting up of a body like this would be useful for both the Government as well for the business community, Mr Jain said.

Referring to resource mobilisation, the Chamber President suggested that the Government should promote fiscal discipline and transparency to avoid reckless spending at the end of the financial year. The fund allocation should be acted upon soon after the adoption of the State Budget to avoid lapse of funds.

According to Mr Jain, the Chief Minister himself had admitted that 95 per cent of the total revenue of the State was being spent on salaries, pensions and interests on debts.

It was also pointed out that various government departments were overstaffed without any clear-cut job definitions and responsibilities.

Moreover the Government has reinstated the excess benefits of the employees, which were withdrawn in 2002.

The Chamber therefore strongly feels that it is high time that the Government should give priority to the needs of 3.25 crore population rather than 5 lakh-odd government employees.