The Tamil Nadu government is in the process of converting at least 14 government-controlled societies into companies registered under Section 8 of the Companies Act, 2013, in a bid to improve their functions and make them available for scrutiny by various auditing mechanisms.
Three decades-old Guidance (formerly known as the Tamil Nadu Industrial Guidance and Export Promotion Bureau), the nodal agency with the specific mandate of investment promotion and facilitation in the State, is among the societies undergoing the conversion. Tamil Nadu Text Book and Educational Services Corporation; Tamil Nadu Energy Development Agency; Sports Development Authority of Tamil Nadu; Tamil Nadu e-Governance Agency; Zoo Authority of Tamil Nadu; Tamil Nadu Horticulture Development Agency; Tamil Nadu State Seed Development Agency; Tamil Nadu Watershed Development Agency; Tamil Nadu Livestock Development Agency; FaMe-TN or Facilitating MSMEs of Tamil Nadu (formerly MSME Trade and Investment Promotion Bureau); ICT Academy of Tamil Nadu; Tamil Nadu State Mission of Education for all Samagra Shiksha (formerly Sarva Shiksha Abiyan); and State Health Society are the other societies.
A senior official told The Hindu that the conversion of these 14 societies into Section 8 companies were in various stages of completion. “It will aid in their [the societies’] efficient functioning, ensure periodical meetings, make them accountable and help in submission of audit committee meetings.”
The government-controlled societies have been functioning largely with the taxpayers’ money, but “operate outside the treasury system” and “remain outside the legislative scrutiny” of their functioning through Comptroller and Auditor General (CAG) audit and legislative committees such as Committee on Public Undertakings, unlike government companies, a government order (G.O.) issued in this regard pointed out.
With the conversion, these companies will be available for CAG audit (supplementary audit), statutory audit, internal audit, tax audit, Secretarial audit and other necessary check mechanisms under the Companies Act. They will also get timelines for finalisation of annual accounts and filing of financial statements to the Registrar of Companies, and follow guidelines of Finance (Bureau of Public Enterprises), among others. These 14 societies are the initial choices and more of them are likely to be converted into Section 8 companies, the official added.
The initial G.O. was issued in September last year and the process of conversion of these 14 societies (originally registered under the Tamil Nadu Societies Registration Act, 1975) are in various stages of conversion. Once the conversion is complete, these companies will be brought under the Finance (BPE) Department.
