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Updated: June 24, 2011 01:55 IST

Government cold to CAG's quest for new powers

Siddharth Varadarajan
Comment (25)   ·   print   ·   T  T  
A journalist reads a copy of the report of Comptroller and Auditor General (CAG) on 2G spectrum allocation. For the past two years, the CAG has been pushing the Finance Ministry — its nodal ministry — for crucial changes in the 1971 Audit Act. File photo
A journalist reads a copy of the report of Comptroller and Auditor General (CAG) on 2G spectrum allocation. For the past two years, the CAG has been pushing the Finance Ministry — its nodal ministry — for crucial changes in the 1971 Audit Act. File photo

The United Progressive Alliance government may have shown a willingness to draft a new Lokpal Bill, but it is dragging its feet on a proposal to strengthen the public institution that has done so much to expose wrongdoings in public life: the Comptroller and Auditor-General (CAG).

For the past two years, the CAG has been pushing the Finance Ministry — its nodal ministry — for crucial changes in the 1971 Audit Act. The accounting watchdog's concern is that its mandate to summon files and examine the way public monies are spent has not kept pace with new modes of governance that have emerged, especially since liberalisation.

Weekly reminders

In 2010, the CAG sent concrete proposals for amendments to three broad areas, but the government is still mulling over its response. This, despite getting formal reminders on an almost weekly basis.

The official silence is not surprising given that audit reports have become something of a political hot potato. The capital was rife with reports of corruption in the telecom sector, for example, but it was only when the CAG report on the 2G spectrum allocation confirmed the scam that the government was forced to act. The latest audit report to set off a political firestorm is on oil and gas production sharing contracts, with the CAG's leaked draft saying Reliance Industries was shown “undue favours” in its KG basin operations.

The KG report is still being finalised, but its long-gestation period — work began in 2006 — and tentative conclusions reflect the weakness of the audit mandate. The Petroleum Ministry dragged its feet in giving documents (despite having asked for the audit in the first place) and private companies refused to share relevant information. The CAG now wants this situation rectified.

The first amendment it is seeking relates to the speed with which government departments respond to audit requests. Crucial audits get delayed because ministries aren't obliged to respond within a specified time frame. Just as the Right to Information Act gives ordinary citizens the right to get an answer to their questions within 30 days, the CAG wants a similar deadline for official responses to its queries.

The second change pertains to the mandatory disclosure of finalised audit reports. Governments delay the tabling of reports which are politically inconvenient. The CAG's audit of the Delhi Metro Rail Corporation was not tabled in Parliament for a year. And the Maharashtra government held on to a report for 18 months because it contained adverse comments on Vilasrao Deshmukh, tabling it only when the CAG threatened to have it released through the Governor.

With these examples fresh in its mind, the CAG wants the law to specify that governments must immediately table reports submitted while the legislature is in session, or within the first week of the next session, if submitted in between.

Finally, the CAG wants the 1971 Act to clarify its powers to audit new forms of government economic activity such as public-private partnerships and joint ventures, and new conduits of expenditure not envisaged when the law was first framed — such as the routing of money for the Sarva Shiksha Abhiyan, the National Rural Health Mission and the MNREGA through panchayati raj institutions and non-governmental organisations.

By some estimates, more than Rs. 80,000 crore is spent this way every year, beyond the reach of the CAG's regular audits. Because the CAG doesn't audit this expenditure, Parliament too does not get to review how well this money is being utilised.

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Today, CAG has lesser powers than an ordinary citizen of India who can seek information within 30 days under RTI Act.I think the government today treats the institution of CAG inferior than an ordinary citizen who can question an information not given and the information provider may have to shell out Rs 25000/-. what about CAG it can merely make noise that information was not given. the defaulter not even responsible to share with Rs. 25000/-. It is the parliament which makes the law, the draft being proposed by government of the day in shape of a bill. Do we mean that Parliament will never make any law if the the executive does not place any bill for consideration? If so, who prevails upon whom.Is there any other course of action the CAG can take,if the government does not place the draft audit act, proposing reforms and seeking more powers.

from:  A K Jha
Posted on: Jul 2, 2011 at 14:39 IST

This sort of situation where audit is not being given due importance, is available not only in State/Central Govts. but also in many institutions especially PSUs. The worst part is that in many nationalised banks those officers who are posted/working in Inspection/Audit Departments are overlooked at the time of promotion.

from:  Chandrasekaran V
Posted on: Jun 24, 2011 at 21:36 IST

The unwillingness of the government shows that this government is riddled with people of self interest over the country. If it is not from the pressure of the civil society the corrupt Congress government would have poured cold water on the Lokpal bill also. I think it is time for people to rise from the example of Anna.

from:  Sathish
Posted on: Jun 24, 2011 at 21:07 IST

That is true, Mr. Hazarre and Baba Ramdev seems to be enemies to the UPA government. Once it is a alliance, more dangerous than the single party majority in the Parliament. Only solution, to bring more and more new faces to the Parliament then we would be able to achieve clean system in India. Otherwise, we will continuously be suffering in the name of UPA or BJP or Alliance. All educated people should come forward to join the people who are on the process to bring change in this country.

from:  Ram Kishan Singh, Geneva
Posted on: Jun 24, 2011 at 21:05 IST

The government does not want to be accountable. CAG has done a good job in bringing the corrupt to the notice of people. The government has also defaced the Lokpal bill draft which could have brought the corrupt to justice. Sibal must not mislead the people of this country. The government has been fooling the people for too long. The government has always created ruckus, diverted attention of people on foolish issues. and kept looting the coffers of the nation. Now it should be serious, listen to Annaji and draft a good Lokpal bill or else it risks loosing its job.But for CAG the 2G scam and the coal scam could not have ever come to light.

from:  Ayesha Ahmed
Posted on: Jun 24, 2011 at 16:58 IST

This is a very very vital issue that needs to be immediately addressed by the Govt. If the Govt does not wish to add more dirt to their spoiled reputation, then the CAG request for these basic powers to be able to audit the spending of taxpayer's hard-earned money in a time bound and accountable manner by all involved parties needs to be immediately addressed. Common man has woken up from his slumber sleep now and the Govt cannnot afford to continue to sidestep the issue anymore...

from:  Kaleeswaran
Posted on: Jun 24, 2011 at 14:31 IST

Apropos of the expose on the NDA Govt. over the CAG, it is widely known secret that the Govt. is corrupt from grass roots. CAG, interestingly, comes to the mind of the politician if and only if he/she sits in the opposition bench, when they cry 'empower CAG'. Otherwise not much can be expected from this Govt. No politician is going to take action on oneself. There is no question of self restraint either. Under these circumstances it is anybody's guess as to how the public institutions are methodically stymied by this Govt. More importantly, it is the current CAG who has taken up this matter seriously enough! It was only after T.N. Seshan became CEC that we came to know of the strengths of that institution.

from:  Aditiyaa
Posted on: Jun 24, 2011 at 13:52 IST

I always had a believe in our leaders especially Dr. Manhmohan Singh, Pranab Mukherjee and P. Chitambram. But in recent times looking at the attitude of all these, I felt really bad. There were enough news in media about the 2G and Commonwealth scams when these were happening. No action was taken to stop those. It was apathy of govt towards common man whose money was allowed to be looted. The worst thing is that even after such big looses, govt is not determined to stop corruption at top level. Nobody in the govt is giving strong arguments against Jan Lokpal Bill. CBI is out of RTI act, nobody wants to explain why? CAG recommendations are pending for years. On what basis, UPA is claiming that they are serious in fighting the corruption. Instead of punishing guilty, laws are made to save them. In developed countries like US president always give explanation on key issues on national channel. Where is our PM? It seems that for every demand people have come on streets.

from:  Parveen
Posted on: Jun 24, 2011 at 13:31 IST

The government seems hell bent on weakening the few institutions promoting good governance. CAG, more than any other institution (apart from judiciary), has emerged as body promoting transparency , accountability and rooting out corruption in the government. Even the CBI did not move against the telecom minister despite knowing everything. It was only after the CAG report that they were forced to take action. The government should support such organizations by strengthening them and not make them irrelevant by ignoring their legitimate demands.
Maybe someone should show this article to Anna Hazare and ask him to take up this issue.

from:  G Ramesh
Posted on: Jun 24, 2011 at 11:45 IST

This government has a lot of dirt on their hands. It had the best opportunity since independence with political stability, strong financial resources as a result of growth and above average agricultural produce. Whether it is Chicago commodity index seeing sugar double in a day's trading like never in history or whether the onion prices or rotting of food grains in depots or abysmal backup stocking to manage disasters. CWG is a shame well covered across world courtesy NY times, The Guardian or Sydney times and more.
Its reactive where it is required like 26/11, Naxal issue, and the list goes on; very proactive in sidetracking scams that are reported today. Between 2004 & 09 as per an US based NGO report siphoning of money out of India is expected to have equalled the entire monies siphoned out between 1947 and 2003/4 and crossed well over by now. All under the nose of prime minister whose area of expertise apparently is finance. History will record this period as the dark(est).

from:  Pavan Peechara
Posted on: Jun 24, 2011 at 11:34 IST

What do you expect from a Govt. which is hell bent on stifling public demand for probe. Even while interacting with the media they are so arrogant and dismissive of all the wrong-doing despite all the evidences proving their own types guilty. Members of the 'Lokpal' bill drafting committee were staunchly defending Mr. Raja only weeks back. How do we expect them to add more teeth too CAG or CVC?

from:  Rahul
Posted on: Jun 24, 2011 at 10:38 IST

This amendment's importance is equal to that of Lokpal bill. The first area of request: Fixing a time frame to responding to audit requests - is a very basic need. If the Government has problem with that, then it clearly states that they have things to hide.
Even a small percentage of inefficiency with 80,000 crores results in deprivation for lot of people. If India wants to be a progressive nation, where its poor are cared for and uplifted, CAG should audit the new forms (as well as any form that may come in future) of governement economic activity. It is indeed a grave injustice to people when government does not disclose finalized audit reports. India has a long way to go before it can ensure that the public money is spent meaningfully. CAG is one instrument which can help us ensure proper utilization of the taxes paid. In such a scenario, I will only be happy to pay taxes.

from:  Venkat
Posted on: Jun 24, 2011 at 09:37 IST

CAG is right in its demands.The government must act accordingly if it is serious about eliminating corruption.The government's reluctance only shows the lack of its willingness to eradicate corruption given only the ministers and its officials are the ones who are very involved in it.

from:  Rishu Kumar
Posted on: Jun 24, 2011 at 09:26 IST

Whoo.. The face of the UPA government gets darker day by day...

from:  Saravanan
Posted on: Jun 24, 2011 at 08:48 IST

It is surprising and almost unbelievable the way this government is behaving since the day one scam after the other has been exposed. Instead of being open and receptive to questions, it goes into an aggresive mode. What was the need for some of its leaders to bad mouth civil society leaders and try to confuse the public if they are not culpable in the corrupt acts?
CAG or Lokpal will only help when the leaders of this country embrace it, if not India will face another freeom revolt this time from the charltans sitting in ivory towers.

from:  Suresh Kumar
Posted on: Jun 24, 2011 at 07:48 IST

Thank you for bringing these vital issues to the public domain. The points raised by CAG are simple and straight forward for good governance. By cold shouldering the CAG quest it seems very apparent that UPA 2 is far from interested in transparent administration. Apparently UPA 2 has many skeletons in the cupboard and can least afford transparency. It is so unfortunate that humble and self respecting Indians will have endure this noxious and corruption-ridden regime till 2014 general election to teach a lesson which it cannot forget in a hurry.

from:  N.G. Krishnan
Posted on: Jun 24, 2011 at 07:25 IST

I have repeatedly said that ours is not a democracy but a 'chorocracy'. The government having been embarassed so much that they will prevent the CAG making further in roads into it's money making activities.The electorate should not elect these thieves who have plundered our country and the taxes we pay. We have been paying an education cess for many years. Has anybody been explained as to how much has been collected and how much of it spent and where? When even the paltry interest earned by aam admi in a savings bank account is taxed when inflation is raging at more than double the savings bank interest rate these thieves are dacoits. Surprisingly nobody questions this in the budget session.

from:  S N Iyer
Posted on: Jun 24, 2011 at 06:48 IST

The govt will not change .Reason; even with the existing power the CAG is exposing lot of corruption .If more power is given more corruption will come out quickly .The govt will not like it.

from:  Gopal
Posted on: Jun 24, 2011 at 06:42 IST

Every credible action against corruption by UPA-2 has always been a forced response ,fearing public backlash, so the question of their 'willingness' to talk on Lokpal Bill is a debatable point. It is obvious that the Govts. of all political hues have been guilty of not strengthening or even deliberately downgrading watch-dog institutions like the CVC and the CAG , lest they would expose their wrong-doings.
The three aspects of reforms sought by the CAG, namely, timely response to deliver files for audit , Publishing the audit reports, however, unpalatable it may be, within a specified time frame, and bringing all new schemes under CAG purview , are reasonable and logical demands of CAG , which any honest and transparent Govt. would agree or would implement on its own if it has the citizens interest at heart. But that would be too much to expect, especially of this present Govt. which is steeped in corruption. Hopefully Lokpal Bill addresses this ,albeit, indirectly.

from:  K.S.Ranganathan
Posted on: Jun 24, 2011 at 06:36 IST

The CAG must given all power for discharging its duties as the watch dog of Public money.It can play better role in monitoring govt spendings and its revenue.But it is doubt whether present UPA govt will do something to strengthen the public institution.Further Govt must appoint CAG from IA&AS cadre unlike from IAS cadre which govt has been resorting to appoint CAG from Secretaries of IAS cadre.If done public may have true and correct Audit Report.

from:  AV Deshpande
Posted on: Jun 24, 2011 at 05:28 IST

Audit is only system verification.It is good if practiced and abide by the system religiously.No one is above law or system.It is high time that the Government or Private should practice and follow the regulations without bias. It is good for the country's growth in many aspects.

from:  N.Srinivasan
Posted on: Jun 24, 2011 at 03:49 IST

As an ex -Employee of the Audit department I can say that both Central and State Governments do not give adequate support for the effective functioning of the Audit Dept.First audit Dept. has not got enough staff, not adequate finance and not enough liberty to appoint staff. More often audit does not get enough cooperation from Government in making documents available for audit scrutiny and on many occasions audit queries are not promptly answered and returned As stated in the above article audit reports are not placed before the State Assemblies/parliament well in time and there is invariably a delay in taking action on the audit reports As audit is not having enough staff we are forced to conduct only a test audit not covering all the activities of the Government.
If government is serious they should meet the genuine requirements of the C&AG. An effective and fearless audit is a must for a true democracy.

from:  V.Radhakrishnan
Posted on: Jun 24, 2011 at 02:45 IST

Yours is a timely wake-up call for the citizenry. CAG gives six weeks' time at the penultimate stage; seldom do the auditee-ministries honour it; seldom does the CAG stick to the deadline, because of a gentlemanly approach. Thus, the Audit Reports get unduly delayed. All governments tend the lay the Report before the Legislature on the closing day, to throttle discussions. As you say, 'Governments delay the tabling of reports...' Is this not unconstitutional? Thereafter, PACs pick and choose. The time has come for the CAG to report to the People direct. The Department of Dirty Tricks should be exposed.
I share an anecdote as a former Accountant General. The Speaker vehemently criticized the AG in the House, for undue delays. I went and explained to him. He gamely apologized - in the House. But, this was in 1989.

from:  Soundararajan Srinivasa
Posted on: Jun 24, 2011 at 01:15 IST

The article is high lighting the deficiencies in Governement departments in answering mandatory requirements; a good solution would be to send copies to the PMO's office so that there will be good check for ensuring prompt actions.This way the PM would also be able to know how the ministries are functioning since the PMO can bring the matter to his personal attention in case of any callousness on part of any ministry.

from:  MSVenkataraman
Posted on: Jun 24, 2011 at 01:01 IST

THE HINDU is doing a great job of spreading awareness on critical issues. It is a good sign for India as People have started to question the Govt, and everybody wants to see accountability for every penny we pay as tax. It is high time Govt bring transparency in all Govt depts. As Anna said - Govt is servant to people and not vice versa. The younger generation have an important role to play in this revolution with guidance from educated older generation.

from:  Suresh
Posted on: Jun 24, 2011 at 00:56 IST
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