Para 2.5.1 — MSO (Audit)
Original Rule Text
2.5.1 The nationalised industries and State Undertakings, whether of the Central, State or Union Territory Governments, which function on commercial lines and whose commercial accounts come under the audit of the Comptroller and Auditor General can be broadly grouped into the following four categories:
(i) Government companies (as defined in Section 617 of the Companies Act, 1956), i.e. companies in which the Central, State and/or Union Territory Governments own not less than 51 per cent of the paid-up share capital;
(ii) companies that are deemed Government companies under Section 619-B of the Companies Act, 1956;
(iii) statutory bodies wholly or mainly financed by Government and set up under Acts of Parliament and/or State or Union Territory Legislature; and
(iv) concerns, i.e. Government commercial and quasi-commercial departmental undertakings, that are managed departmentally.
What This Means
Nationalised industries and state undertakings whose commercial accounts are audited by the CAG fall into four broad categories: government companies (where government owns at least 51% of paid-up share capital), deemed government companies under Section 619-B of Companies Act, statutory bodies set up under Acts of Parliament or state legislatures that are mainly financed by government, and departmentally managed commercial or quasi-commercial concerns run directly by government departments.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Government companies require at least 51% government ownership of paid-up share capital
- 2Deemed government companies are covered under Section 619-B of Companies Act, 1956
- 3Statutory bodies are set up under parliamentary or state legislature acts and are mainly government-financed
- 4Departmental undertakings are commercial concerns managed directly by government departments
- 5All four categories are subject to CAG audit of their commercial accounts
Practical Example
A new government employee in the Commercial Audit wing is assigned to audit different entities. She audits Steel Authority of India Limited (a government company with 65% central government shareholding), a port trust (a statutory body under a central act), and the government printing press (a departmentally managed concern). She realizes each falls under a different category but all come under CAG's audit jurisdiction.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What makes a company a 'Government Company'?▼
What is a deemed government company?▼
What is a departmentally managed concern?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.