Georgia plans to significantly reduce quasi-fiscal activities in state-owned enterprises, with the goal of bringing them close to zero in the coming years, according to Finance Minister Lasha Khutsishvili.
Speaking to BMG, Khutsishvili said the reform of state enterprises aims to ensure that companies no longer carry out budget-like social or subsidy programs. Instead, any support for vulnerable groups or sectoral initiatives should be financed directly from the state budget in a targeted and transparent manner.
He cited Georgian Railways as a successful example of this approach, noting that social or policy-driven costs should not burden state companies themselves. “If the state wants to subsidize certain activities, it should be done directly through the budget, not through state enterprises,” he said.
Khutsishvili added that the transition is already underway and will gradually reduce such activities across all state-owned companies. While the process cannot be completed immediately, he said the trend over recent years indicates steady progress toward eliminating these practices.
According to the minister, the ultimate goal is to improve the financial health and operational efficiency of state enterprises, making them fully commercially oriented and removing non-core policy obligations from their balance sheets.
