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Six out of 7 Corpns under Industries Deptt running into huge losses continuously

Steps taken during past many years yet to show positive results

*Govt ignoring CAG report, allowing drain on exchequer

Mohinder Verma

JAMMU, Jan 19: Notwithstanding tall claims of successive Governments including the present dispensation about infusing new lease of life in loss making Public Sector Undertakings, six Corporations under the administrative control of Department of Industries and Commerce have been continuously running into huge losses thereby putting unnecessary burden on the State exchequer. The most shocking aspect is that Government doesn’t want to put an end to the prevailing situation by acting on the recommendations of the Comptroller and Auditor General of India, which had suggested closure of such Corporations.
The Department of Industries and Commerce has seven Corporations under its administrative control and six of them are running into huge losses as whatever steps planned and initiated to make them profitable during the past many years have failed to yield desirable results till date.
These loss making Corporations are —J&K Minerals Limited, J&K Cements Ltd, J&K Handicrafts (S&E) Corporation, J&K Industries Limited, J&K Handloom Development Corporation and J&K State Industrial Development Corporation.
Whenever the issue of financial non-viability of these Corporations comes to the fore particularly in the Legislative Assembly, the Government makes tall claims about initiating steps to infuse new lease of life in these bodies but the fact remains that situation has not changed and these Corporations are continuing to be a big drain on the State exchequer.
This can be gauged from the latest document of the Industries and Commerce Department, the copy of which is available with EXCELSIOR.
About J&K Minerals Limited, which was started with an authorized/paid up capital of Rs 8 crore in the year 1960, the Industries and Commerce Department has admitted in the official document that none of the ventures initiated by J&K Minerals Ltd proved economically viable and company lost heavily on almost all the projects forcing the Government to close down all its unviable ventures.
At present the company is engaged in gypsum mining from open cast mines at Assar in Doda district and at Parlanka in Ramban district besides extraction of coal from mines at Kalakote. Expressing optimism, the Industries and Commerce Department said, “these activities have potential to bring overall viability of the Corporation provided it gets rid off its heavy overburden on account of labour cost and other none productive offices and projects”.
Similarly, J&K Cements Limited is still in losses despite the fact that it has started commercial production of cement at Khrew in Kashmir valley and Samba in Jammu province since January last year.
“The company has suffered losses for various reasons including unrest in Kashmir valley”, the Industries Department said, adding “as a result of unrest company suffered production loss and consequently resulted into less revenue”. However, the department claimed that because of different measures initiated during the past some time the liabilities of the company have been reduced by Rs 16 crore during the current financial year.
Now, in order to bring J&K Cements Limited out of the losses, the Industries and Commerce Department is pinning hopes on increasing production from its cement plants on the ground that demand of cement from Government has started picking up after issuance of order directing various departments to purchase cement from this company in the first instance.
As far as J&K Handicrafts (S&E) Corporation is concerned, which was established in 1970 for extending marketing support to the manufacturers, artisans, craftsmen and cooperative societies by showcasing and selling their products, the Government is still attributing the losses of this company to the turmoil in the Kashmir valley right from 1990, which otherwise cannot be justified in anyway.
“Corporation is striving hard to improve its performance by utilizing available means to the maximum extent and has put in place very strong monitoring mechanism, accountability and support to the sales outlets to achieve the targets and to enhance the resource generation”, reads the document of Industries and Commerce Department without explaining as to whether such initiatives were not taken in past.
While admitting that JK Industries Limited’s financial condition has not improved despite numerous steps initiated in this regard, the department hoped that the new initiatives including the Business Plan would help JK Industries Limited to become financial viable and the unhealthy trend of loss making would stop.
Similarly, the Industries and Commerce Department has admitted that J&K Handloom Development Corporation has yet not become profitable body and it is still getting budgetary support from the State Government as loan to meet out the salary of its employees.
The department has further admitted that J&K SIDCO is still running into losses despite showing positive signs of cash surplus during the past two years due to several new initiatives.
“The Corporation has undertaken many projects which have generated revenue and it is in the process of creation of land bank which is expected to further strengthen the financial position of the Corporation”, the Industries and Commerce Department has claimed in the latest document.
Notwithstanding poor financial condition of these Corporations, the Industries and Commerce Department has yet not taken seriously the recommendations of the Comptroller and Auditor General of India, which had in the recent past suggested closure of loss making bodies in order to put an end to drain on State exchequer.
“It is shocking that Government does not want to act on the suggestions of highest audit body of the country and prefers to allow loss to the State exchequer”, sources regretted.

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