Thiruvananthapuram: Loss-making PSEs have become a major burden on Kerala’s finances, with their accumulated losses rising sharply over the past few years, according to a white paper tabled in the State Assembly by Chief Minister V D Satheesan on Thursday.
The white paper, prepared by a three-member committee headed by former Cabinet Secretary K M Chandrasekhar, recommended restructuring state-owned enterprises and said the government should consider disinvestment, privatisation, or even closure of non-strategic and potentially non-viable entities, while protecting workers’ interests.
Follow The PSUWatch Channel on WhatsApp
It said such reforms were necessary to reduce the burden on the exchequer and improve the financial health of the state.
The report noted that the accumulated losses of state-owned enterprises rose from Rs 42,930 crore in 2021–22 to Rs 72,851 crore in 2024–25, despite continued government support.
The report, titled Kerala’s Fiscal Health: A Status Report, said most government companies and statutory corporations recorded losses over the past decade, with public utilities emerging as the biggest loss-making sector.
According to the white paper, three major public utilities—the Kerala State Electricity Board Limited, the Kerala State Road Transport Corporation, and the Kerala Water Authority—accounted for the bulk of losses incurred by state enterprises.
KSRTC remained one of the biggest concerns, posting a loss of Rs 1,580 crore in 2024–25 and carrying a negative net worth of nearly Rs 19,821 crore.
The report said persistent losses had completely eroded the corporation’s net worth and continued to place a heavy burden on state finances.
KSEBL, meanwhile, had the highest negative net worth among state enterprises at Rs 35,149 crore in 2024–25.
The report said the utility’s heavy dependence on power purchases from outside the state, which are more expensive than internally generated electricity, was a major reason for its weak financial performance.
Follow PSU Watch on LinkedIN
The white paper also noted that public enterprises generated only limited returns for the government through dividends and profits while continuing to depend heavily on budgetary support, grants, and subsidies.
It further pointed out that KSRTC, KWA, and KSEBL together accounted for around 69 percent of total loan repayment arrears owed to the state government by public sector entities and related institutions.
(PSU Watch is India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy. 👉 Click to join our channel now: PSUWatch WhatsApp Channel. Prefer LinkedIn? Follow PSU Watch on LinkedIN. Click to stay connected on Twitter here and stay updated.)