On a day Parliament was forced to shut down over Opposition calls for the resignation of Prime Minister Manmohan Singh in the wake of the Comptroller and Auditor General’s incriminating report on coal blocks allocation, the CAG itself held firm against increasingly ferocious attacks by the United Progressive Alliance.
Click >here for PDF version of a graphic on coal blocks allocation.
An official close to the CAG and the preparation of the controversial report, released last week, says the real intent driving the government auditor’s work is to end the business of crony capitalism. “The loss figures in all the reports are intended to be red flags pointing towards governance failure. The government should focus on fixing responsibility and enforcing accountability, rather than quibbling about the quantum of loss,” he points out.
The CAG first attracted the government’s wrath in November 2010 after the release of its report on 2G spectrum that was allocated without auctions in 2008. The loss estimate on account of this decision was placed at a staggering Rs. 1.76 lakh crore. Its report on coal blocks allocation, which estimated a loss of Rs. 1.86-lakh crore caused by delaying auctions, is even more politically damaging since Dr. Singh held additional charge of the Coal Ministry between 2006 and 2009.
“The violent opposition to our loss figures is baffling considering that they have been drawn from the government’s own documents as well as financial information that is in the public domain. These numbers are not a figment of our imagination,” the official explained.
Opposition is an unnecessary obstacle since work on about 150 more audit reports is in progress and these will be released before May 2013, when CAG Vinod Rai retires. “Governance failure is an endemic problem in every sector, which will make it near impossible for us to produce favourable reports designed to present the government in a good light,” the CAG official said.
Responding to the government’s accusation that the CAG was interfering in policy matters by recommending auctions, the official emphasised that it had not recommended auctions at all. “It was the Coal Secretary who said that the system of allocation by a screening committee was opaque and led to lobbying and windfall gains to the allottee. It was he who recommended auctions in May 2004, which the Coal Minister accepted in October 2004. The CAG’s report only questioned why it took eight years for the government to operationalise its own decision.”
In the case of 2G, it was first the Prime Minister, followed by the Finance Secretary, who argued the case for auctions or market-based pricing — which was ignored by the then Telecom Minister, A. Raja.
In both cases, the auction option was feasible and came from within the government, and not the CAG.
The CAG, which has also been under government attack for meddling in policy matters, maintains that it has not breached its mandate as a constitutional authority empowered to audit government expenditure and receipts.
