Understanding Statutory Corporations

A statutory corporation is a type of public enterprise in India. These are bodies corporate established by a special Act of the Parliament or by the State Legislature. The Act defining the corporation lays down its powers, functions, rules, and regulations governing its employees and relationship with government departments.

Analyzing the Given Options on Statutory Corporations

• Option 1: Statutory corporations are public enterprises that came into existence by a special act of the Parliament

  This statement accurately describes the fundamental characteristic of a statutory corporation. They are created specifically through legislation passed by the Parliament (or a State Legislature). This gives them a distinct legal status and defines their scope of operation.

• Option 2: Statutory enterprises are subject to same accounting and audit procedures applicable to government departments

  This statement is generally not true. While government departments follow specific accounting and audit rules (often prescribed by the Comptroller and Auditor General of India - CAG), statutory corporations usually have their own rules and procedures for accounting and audit, as laid down in their enabling Act. Their accounts are typically audited by the CAG or auditors appointed in consultation with the government.

• Option 3: The employees of statutory enterprises are civil servants

  This statement is incorrect. Employees of a statutory corporation are employees of that specific corporation, governed by its own service rules and conditions. They are not considered civil servants, who are directly employed by the government and subject to government service rules.

Based on the analysis, only the first statement accurately describes a key feature of statutory corporations.