Don’t cage CAG

Union minister for human resources development Kapil Sibal has called for a debate on the role of the Comptroller and Auditor General (CAG) of India. This suggestion has come in the wake of recent findings of the CAG that have embarrassed the government considerably.

The government would be making a huge mistake if, in the name of a debate on the role of the CAG, the prestige of this body were sought to be diminished merely because the auditor of the country’s public finances has done its job diligently.
Even as supporters of the ruling regime seek to deny that Prime Minister Manmohan Singh and home minister P. Chidambaram (in his capacity as the finance minister) had turned a blind eye to the 2G spectrum scam by passing on the blame to disgraced former telecom minister A. Raja, the leaked draft report of the CAG highlighting how the ministry of petroleum and natural gas allegedly favoured Reliance Industries Limited, among other companies, while putting together a contract to extract natural gas found in the Krishna-Godavari basin, has added to the government’s discomfiture.
On November 16 last year — ironically on the day the CAG’s report on the 2G scam was tabled in Parliament and a day before Mr Raja was arm-twisted into putting in his papers — Dr Singh delivered a speech to commemorate the 150th anniversary of the establishment of the office of the CAG, in which he stated that the authority’s reports were taken “very seriously” not just by the media, but also by the public, the government and Parliament.
Dr Singh said: “(There is) a huge responsibility on the institution to ensure that its reports are accurate, balanced and fair. Very often, there is a very thin line between fair criticism and fault finding, between hazarding a guess and making a reasonable estimate, between a bona fide genuine error and a deliberate mistake. As an important watchdog in our democracy, it falls upon this institution to sift the wheat from the chaff, to distinguish between wrong-doing and genuine errors, to appreciate the context and circumstances of decision-making processes”.
Dr Singh was careful choosing his words. Mr Sibal has been less circumspect. Soon after he was given additional charge of the communications portfolio, he argued at a media conference that since the official policy for allocation of spectrum in 2008 was “first come first served”, there was no loss to the exchequer thereby indirectly seeking to trash the CAG’s claim that the notional loss on account of undervaluation and misallocation of spectrum was a huge `1,76,000 crore or the equivalent of nearly $40 billion. He contended that the “presumptive” loss to the exchequer that had been calculated by the CAG on the basis of certain assumptions was “utterly erroneous”.
Mr Sibal’s claim threw up a number of questions that have not been answered. If Mr Raja’s claim that he did what he did with the knowledge and consent of the Prime Minister, why then did Dr Singh ask him to resign? Why are Mr Raja, officials who worked closely with him and representatives of telecom companies behind bars if the government had indeed not lost even a single paisa, as Mr Sibal claimed? Why were officials of the CAG not convinced by the answers given by officials of the department of telecommunications to their queries?
On June 18, Mr Sibal reportedly said about the CAG: “What should be the CAG’s role in the post-1990s economic scenario? There are two views. One that says the CAG should comment on policy and there is another classical view that it should only deal with the expenditure incurred and whether it has moved away from the intent of allocation. That it should not comment on the merits of a transaction without understanding the circumstances in which the decision was taken. Yes, there should be a debate”.
Whereas it is nobody’s case that the CAG should be formulating government policies, the country’s apex auditing body and guardian of public funds has every right to question and criticise the government’s policies when they lead to losses to the exchequer. The CAG derives his powers from Articles 149, 150 and 151 of the Constitution of India. He is appointed by the President of India and can be removed from office only in the manner in which a Supreme Court judge is removed, that is, through an elaborate process of impeachment. After retirement, the CAG is not eligible to hold any other office in either the Union government or any state government. He holds a unique position — he is neither an officer of Parliament nor a functionary of the Executive.
When the alleged kickbacks on the sale of howitzers or field guns by Sweden’s Bofors to the Indian Army blew up into a major political scandal in 1987, the controversy had been kicked off by a CAG report. The CAG then was T.N. Chaturvedi who went on to join the Bharatiya Janata Party, become an member of Parliament and then a governor. In the late-1980s, although the Congress vehemently denied that bribes had been received by the then Prime
Minister Rajiv Gandhi, the party never attacked the institution of the CAG.
Times have changed a lot since then. The role of the government in the economy has come down making it all the more important that the CAG scrutinises how the people’s money is spent in so-called public-private partnerships. There is much that needs improving. Barely one-third of the CAG’s recommendations are acted upon by Public Accounts Committees at the Centre and in the states. The CAG’s reports often come rather late in the day, after the damage has been done.
But today’s rulers would be doing the country a huge disservice if they were to trash an institution that could check the discretionary powers of our politicians and bureaucrats and curb their proclivity to misuse public money.

The author is an educator and commentator