Excelsior Correspondent
SRINAGAR, Apr 4: Investments made by the Union Territory of J&K in Public Sector Undertakings (PSUs), corporations and other bodies have generated poor returns, significantly below the cost of Government borrowings, raising concerns over fiscal efficiency and financial management.
According to the latest report of the Comptroller and Auditor General of India on UT finances for 2024-25, the Government’s total investment stood at Rs 605.10 crore as of March 31, 2025.
This includes Rs 72.26 crore in Government companies, Rs 236.50 crore in cooperative societies, Rs 193.91 crore in statutory corporations and Rs 102.43 crore in rural banks.
In addition, Rs 3,426.75 crore invested by the erstwhile state remains to be apportioned between J&K and Ladakh.
The report noted that returns on these investments during 2024-25 amounted to Rs 130.78 crore, translating to just 3.24 percent.
Over the past five years, returns ranged between zero and 3.24 percent, while the Government paid interest between 6.65 percent and 8.82 percent on its borrowings.
This mismatch between low returns and higher borrowing costs resulted in a gap of Rs 1,883.60 crore, indicating weak financial performance of PSUs and imposing an implicit burden on the Government’s finances.
Out of 52 state PSUs with a total investment of Rs 4,031.25 crore, only one PSU generated returns during 2024-25, underscoring the limited profitability of these entities.
The report also highlighted the absence of a formal dividend policy. Except for J&K Bank, none of the PSUs paid dividends to the Government in the last two years, leading to negligible non-tax revenue generation.
The Government has, however, stated that it plans to introduce a dividend policy and set profit targets for PSUs.
Meanwhile, the UT’s loan and advance portfolio has also shown weak performance. Outstanding loans increased from Rs 231.91 crore in March 2024 to Rs 246.56 crore in March 2025.
During the year, the Government disbursed Rs 15.09 crore but recovered only Rs 0.44 crore, reflecting poor recovery mechanisms.
The report observed that low recoveries, particularly from loss-making PSUs, have led to accumulation of outstanding loans and locking up of public funds. Interest receipts have remained minimal over the years, further highlighting inefficiencies in loan management.
Additionally, Rs 1,740.44 crore in loans extended by the erstwhile state remains unallocated between the two Union Territories.
The Government, as per the report, acknowledged these concerns, stating that loan disbursements have been curtailed in recent years and that funds are now being routed as loans to PSUs to ensure greater accountability and financial discipline.
Follow our WhatsApp channel
