It said the ministry had failed to follow the general financial rules as suggested by the Expenditure Finance Committee while extending a loan of Rs 100 crore to IIT Madras research park, a company set up under the Companies Act.
The committee, it said, had observed the loan should bear an interest rate as applicable for investment loans to public sector undertakings which was 11.5 per cent per annum.
"... The agreement executed between the ministry and the company in February 2010 provided for levying an interest rate of three per cent per annum against the applicable rate of 11.5 per cent," CAG said in its report ended March 31, 2011 tabled in Parliament today.
It said the repayment of the loan was to commence from 2013-14 for a period of 10 years.
CAG said after the issue was pointed out, "the Ministry replied in June 2012 that the agreement with the company had since been revised and the latter had agreed to pay the interest at the applicable rate of 11.5 per cent, thus an impending loss of Rs 46.75 crore could be averted". (MORE)