Para 6.3 — MSO (A&E)
Original Rule Text
6.3 In the present day context of the huge loans granted to State Governments, statutory Corporations etc., Government Companies, Quasipublic bodies and private institutions for development and other purposes, it has become an important function of the Accountant General not only to watch the fulfillment of the various conditions on which the loans are sanctioned, but also to ascertain that the loans are utilised for the purposes and on the objects for which they are sanctioned.
# SUBSIDIARY LOAN REGISTER
What This Means
Given the massive scale of modern government lending — to state governments, statutory corporations, government companies, quasi-public bodies, and private institutions for development — the AG's role has expanded beyond just tracking repayments. The AG must now also verify that the conditions attached to each loan sanction are being fulfilled and that the borrowed money is actually being used for the purpose it was sanctioned for, not diverted elsewhere.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Modern government lending involves huge amounts to diverse borrowers
- 2The AG must watch fulfillment of all loan sanction conditions
- 3The AG must verify that loans are used for their sanctioned purpose
- 4This goes beyond mere financial tracking to include purpose verification
- 5Borrowers include state governments, corporations, companies, and private institutions
Practical Example
The State Government lends Rs. 100 crore to a State Industrial Development Corporation for setting up an industrial park. The AG not only tracks the repayment schedule and interest but also checks — through progress reports and utilization certificates — that the money is being spent on industrial park development and not diverted to cover the corporation's administrative expenses or other projects.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
How does the AG verify that loan funds are used for the intended purpose?▼
Is this role limited to state government loans?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.