16th Finance Commission identifies T.N. as one of top three States suffering heavy losses of public sector enterprises

Tamil Nadu has been identified arsenic 1 of the apical 3 States successful the country, which endure from dense losses incurred by State Public Sector Enterprises (SPSEs).

For the twelvemonth 2022-23, the apical 3 States successful this class were Uttar Pradesh (₹32,430 crore), Rajasthan (₹18,814 crore), and Tamil Nadu (₹16,048 crore), according to the measurement 1 of the main study of the 16th Finance Commission. These States travel nether the wide radical of non-north-eastern and hilly (non-NEH) States.

As successful the lawsuit of different non-NEH States, a important information of the losses were concentrated successful the powerfulness sector. In the twelvemonth successful question, the now-defunct Tamil Nadu Generation and Distribution Corporation (Tangedco) had recorded a nonaccomplishment of astir ₹9,192 crore. However, for 2024-25, the precocious published Annual Integrated Rating of the Distribution Companies, compiled by the Power Finance Corporation, enactment the nett aft taxation (PAT) of the Tamil Nadu Power Distribution Corporation Limited (TNPDCL), 1 of the successors of the Tangedco, astatine ₹2,073 crore.

But this had go imaginable owed to the State government’s largesse — the proviso of tariff subsidy of ₹15,772 crore and the takeover of nonaccomplishment of ₹16,107 crore. More significantly, the accumulated shortage of the TNPDCL went down to ₹1,19,153 crore successful 2024-25 from ₹1,66,944 crore of the Tangedco successful 2023-24., acknowledgment to the unbundling of the latter.

Describing the mediocre fiscal show of SPSEs arsenic “a load connected State budgets,” the Finance Commission stated that the State governments had to incur budgetary expenditure successful the signifier of subsidies, grants, equity investments, and loans. Besides, they had to supply guarantees against the loans raised by the SPSEs. The fiscal enactment extended by State Governments to SPSEs successful the signifier of equity, loans, and grants/subsidies done the fund during the twelvemonth 2022-23 amounted to ₹2.5 lakh crore.

The Commission recorded that for 2022-23, the budgetary retired spell of the Tamil Nadu authorities to the SPSEs was ₹26,867 crore and till the extremity of the twelvemonth successful question, the outstanding guarantees stood astatine ₹89,768 crore.

The Commission did not see Tamil Nadu successful the nine of States with a precocious proportionality of loss-making enterprises, a substance that provides solace to argumentation makers and radical of the State.