In a bid to help state government’s 27 fully owned corporations in Jammu & Kashmir to rediscover their growth trajectories, the finance ministry is holding a marathon meeting with all the Public Sector Undertaking and various other institutions on Monday. The meeting will be participated by the top management of all these entities excluding their administrative departments.
“The meeting is first of its kind and aimed at understanding the issues that have led to the failure of these huge ventures,” a senior finance ministry official said. “It will also seek inputs about how the top management of these institutions foresees the revival and the possible costs involved in it.”
Most of the corporations are in red for a very long time and survive on budgetary support from the finance ministry. In certain cases, there is no work at all. There are seven corporations and public sector undertakings which are either making the profit or are in a position to sustain without the budgetary support.
Activities apart, a senior finance ministry official said the major problem that these entities are facing is that they have their accounts in arrears which need to be made up-to-date. “The government has been making investments but it needs to be properly listed in the balance sheets and the corporations have to have up-to-date and clean balance sheets which will enable them to negotiate deals and investments in future,” the officer said.
Horticulture Ministry, the sources in the finance ministry said, has already done a quick exercise and helped its J&K Horticulture Produce Marketing and Processing Corporation (JKHPMC) to become the first entity of the state to financially re-engineer it.
The department converted the cumulative financial assistance till March 2017, a whopping sum of Rs 77.39 crore, into corporation’s fully paid-up share capital besides the interest arrears of Rs 28.75 crore were re-classified as equity share capital.
A clean balance sheet now makes JKHPMC capable enough to secure loans from financial institutions and fund its own plans. For the current fiscal, the corporation is planning to install value-addition equipment in the existing Apple Juice Plant in Doabgah, Sopore, and the establishment of APEDA funded integrated Apple House with CA Store at Chowdrigund, Shopian.
Asked why the finance ministry has not changed the status of the lone corporation – J&K State Finance Corporation Ltd – it directly owns, the official said it is already ‘work in progress’. In the JKSFC, the official said, the issue is diverse shareholding. “There are various institutions owning part of the shares. For instance, SIDBI is holding 25 percent shareholding and now to reduce the shareholding and make it wholly state government-owned affair, we have given buy-back offer to all the stakeholders’ ad they have agreed,” the official said. “Once that happens, we will be in a position to give it a clear direction.” He said the corporation has slightly more than 150 employees and 75 of them are orderlies.
The Monday meeting will help the funding ministry to understand the issues and prospects from the managers’ point of view. This could lead to a focussed attention in the budget 2018-19 that is slated to be presented to the state legislative assembly in the first week of January.
Besides, the ministry has also invited various other institutions like School of Design, Craft Development Institute, Carpet Development Institute, J&K EDI and various other institution that were created by different ministries in last many years. “The idea is to understand their role and potential,” the ministry official said.
The government has already given most of the corporations to the charge of various political appointees who are holding ministerial positions and are designated as Vice-Chairpersons.