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Updated: September 4, 2012 01:14 IST

Don’t undermine the auditor

Era Sezhiyan
Comment (27)   ·   print   ·   T  T  

The Prime Minister is out of line in asserting that the Public Accounts Committee “will” challenge the findings of the CAG. It is akin to issuing a whip to the committee

When the draft provisions relating to the Comptroller and Auditor General were under consideration in the Constituent Assembly, Dr. B.R Ambedkar, Chairman of the Drafting Committee, said: “I am of the opinion that this dignitary or officer is probably the most important officer in the Constitution of India. He is the one man who is going to see that the expenses voted by Parliament are not exceeded, or varied from what has been laid down by Parliament in the Appropriation Act. If this functionary is to carry out the duties — and his duties, I submit, are far more important than the duties even of the Judiciary — he should have been certainly as independent as the Judiciary. But, comparing the Articles about the Supreme Court and those relating to the Auditor General, I cannot help saying that we have not given him the same independence which we have given to the Judiciary, although I personally feel that he ought to have far greater independence than the Judiciary itself” (May 30, 1949)

‘Without fear or favour’

While laying the foundation stone of the CAG office building in New Delhi in July 1954, President Rajendra Prasad said: “… At the present moment when the Government is incurring a huge expenditure on so many welfare projects … it is essential that every rupee that we spend is properly accounted for. This important task — I am afraid, a task not always very pleasant — devolves upon the Comptroller and Auditor General and his office. In accordance with the powers vested in him, he has to carry on these functions without fear or favour in the larger interests of the nation.”

At a similar function in Madras in June 1954, Vice President Sarvepalli Radhakrishnan stated: “Ours is a poor country, its resources are limited and we cannot afford to risk any kind of waste and the Audit and Accounts Department will have to look upon their functions as the functions of the greatest public utility ...” In conclusion, he asserted: “If I have one advice to give and if I am presumptuous enough to give any advice to the officers of the audit and accounts, it is this: ‘Do not shrink from the truth for fear of offending men in high places’.”

At the time President Prasad spoke about “huge expenditure of government projects,” the combined budgetary transactions of the Centre and the States were Rs.1,354 crore (1954-55). In 2010-2011, the total had zoomed to Rs.22, 92,510 crore according to the Economic Survey 2011-12.

When there was some criticism of the CAG’s reports in December 1952, Prime Minister Jawaharlal Nehru chastised the Member: “He [the CAG] is not responsible to the Government and it is open for him to criticise the Government in reports. For him to be criticised on the floor of the House would tend to undermine the special position that has been granted to him to discharge his duties without fear or favour.”

Against the audit’s findings on deficiencies in defence preparedness on May 31, 1962, during the debate on Demands for Grants, Defence Minister Krishna Menon flared up: “Criticism offered by Audit to Parliament must be limited to financial question based on accounts. It is not the function of Auditor General to range over the field of administration and offer suggestion as to how the Government could be better conducted.” Immediately there were points of order and Speaker Sardar Hukam Singh pacified both sides. On June 18, the matter was again raised and the Speaker accepted the suggestion of the Finance Minister to seek elucidation from the Public Accounts Committee on the role of the CAG on the points raised.

In the 1950s and 1960s, with Prime Minister Jawaharlal Nehru as its leader, the Congress had more than 70 per cent strength in both Houses, which naturally gave the ruling party a sufficient majority in all Committees, including the PAC. In 1962, the PAC chairman was Mahavir Tyagi, a senior Congress leader, bold and free in his views.

The PAC made an extensive study of the objectives and practices in the United Kingdom, and of explanations and documents offered by CAG A.K. Roy. Then, Tyagi submitted the PAC report with the following recommendations: “The Committee is definitely of the view that it is the function of the CAG to satisfy himself not only that every expenditure has been incurred as per prescribed rules, regulations and laws, but also that it has been incurred with ‘faithfulness, wisdom and economy.’ If, in the course of the audit, the CAG becomes aware of facts which appear to him to indicate an improper expenditure or waste of money, it is his duty to call the attention of Parliament to them through his Audit Reports. At the present time when there is heavy taxation and heavy expenditure, the Committee hopes that the CAG will pay even greater attention than in the past to this aspect of his duties and that the government will give him every facility to perform them.”

Four months later, in October 1962, the Chinese aggression on India proved the validity of the points raised in the Audit Report. The debacle forced Krishna Menon to resign.

Now scam after scam comes to be reported about the bewildering loss of public funds, counted in lakhs of crores. But at every revelation, the Manmohan Singh government, noted for its zero administrative capacity, maintains there is zero loss.

Can we expect the President and the Vice-President to follow in the footsteps of Rajendra Prasad and Sarvepalli Radhakrishnan, and ask the CAG to carry on his functions “without fear or favour” or advise the Audit officers “not to shrink from truth for fear of offending men in high places?”

On August 27, Prime Minister Manmohan Singh submitted to both Houses his report refuting many points raised in the CAG Report on the allocation of coal blocks. I am not going to analyse the contents of the report.

Horrifying

I am horrified at the remarks he made to the media before going to the Lok Sabha with his report. His message to the media in Parliament House on August 27 was released by the Prime Minister’s Office. The fourth paragraph of the news release said: “I wish to assure the country that we have a very strong and credible case, the observations of the CAG are disputable, and they will be challenged when the matter comes before the Parliament’s Public Accounts Committee.”

I am not concerned here with the Prime Minster’s affirmations about the strong case of the government or the disputable observations of the CAG. What I am strongly against is this sentence in his statement: “…they [observations of the CAG] will be challenged when the matter comes before the Parliament’s Public Accounts Committee.”

How can the Prime Minister say now that the observations of the CAG ‘will’ be challenged when the matter comes before the PAC?

The PAC is set up by Parliament and its proceedings cannot be passed on to others until its report is submitted to Parliament. The Prime minister, however high his position, should not take the PAC for granted. He cannot issue a whip now that the observations of the CAG are to be challenged. He may as well abolish the entire Committee system.

When Hitler came to power in Germany, he proscribed all political parties excepting the Nazi Party; then he amended the law to end all forms of accountability through audit of finance. It is to be hoped that Manmohan Singh and his ministers are not trying to adopt this method to avoid struggling with the cumbersome parliamentary system of a functioning democracy.

(Era Sezhiyan is an eminent parliamentarian and author. He was chairman of the Public Accounts Committee from 1971 to 1973.)

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Prime Minister has every right to defend the actions of his government. This is especially true if CAG is behaving like an agent of the principle opposition party.

from:  Pradeep
Posted on: Sep 6, 2012 at 15:00 IST

Compare these statemetns of old era leaders on the sancitity of CAG.
Also comapre the leaders of the recent times including that of our
current PM. Some eyars back, the then PM addressing a meeting of the
AGs at :Pune said that auditors are seen more as blood hounds rather
thahn as watchdogs. A statement that should not ahve come from a PM.
It created flutters. Earflier, a uniion minsiter giving a fulol page
interev iew to a newspaper -presently a cabinet one - said that
oficers arwe afraid of taking decisions because of CGA, Vignlasnce and
CBI. Instead of encouraging thesre instituions to do their fucntions,
nhere is one minsiter who pooh-pooed them and dirivisly spoke., If
minsiters behave like this, we should curse ourselves for ahving
elected them.

from:  s.subramanyan
Posted on: Sep 6, 2012 at 11:26 IST

During the Nehruvian era CAG reports were not leaked and discussed in the media. Furthermore, resignation of the Prime Minister was not insisted upon even before the report came upon for discussion in the PAC. As a matter of principle, an auditee has every right to challenge contradict, counter the observations of an auditor. Mr. Manmohan Singh was speaking as a representative of the auditee, which in this case is the Government of India. No doubt PAC is an independent institution and is customarily headed by nominee of the main opposition party. But if the opposition party is making a politics of it, the roles are bound get mixed up. I will give this one to Mr Man Mohan Singh, who as the head of the Government has every consitutional right to put forth his point of view and that right was being denied to him by the tactics adopted by the BJP.

from:  Pramod Patil
Posted on: Sep 6, 2012 at 08:30 IST

WOW!! Probably one of the finest article I have read in last several years. We must appreciate, good people still exist.

Unfortunately, We will hear strong opposition to this very clearly mentioned notes with dates, as our current leaders dont know our constitution, but very well understand how to handle media.

Shri Era Sezhiyan, hats off to you Sir.

from:  Suresh Vijayan
Posted on: Sep 5, 2012 at 14:43 IST

Mr. Era Sezhiyan's article came at the right time when the CAG report
is a hot topic. He is perfectly right that the PM must not undermine an
independent body like CAG. The current political environment is dirty
now by colluding with big corporations, corrupt bureaucrats, corrupt
media that the legislative is trying to undermine the all other
independent democratic bodies. This is a true danger to democracy. Mr
PM, please wake up.

from:  Binay Mahanta
Posted on: Sep 5, 2012 at 13:41 IST

Congress is bent upon destroying the constitutional institutions which it finds inconvenient for it. The other parties also have the same attitude towards these institutions. We must save our institutions if we want to save our democracy.

from:  S.R.Darapuri
Posted on: Sep 5, 2012 at 13:22 IST

Mr.Chezhian is a seasoned and very senior parliamentarian. His tracing the earlier proceedings and clarifications of the functions of the CAG are highly noteworthy, which must be read and understood by every citizen and more so by the current parliamentarian, irrespective of their party affiliations. In the true sense, the CAG is the constitutional representative of every citizen of the country to take care of the interests of the country and bring to light the violations. However much the administration may dislike, the citizens, who elect their representatives, want him to bring out the violations and bring the violators to light.

from:  S.G.Ramachandran
Posted on: Sep 5, 2012 at 11:57 IST

Excellent article. Very enlightening to read this article. I believe CAG report on Coal is based on solid facts. I am very sure CAG is not wrong in its maths. He just did what he was supposed to do. PM and Congress is questioning CAG because they are directed implicated by the report. In western country, any PM with such level of corruption allegations would have resigned but this is India where even proven criminals walk free.

from:  Yonga
Posted on: Sep 5, 2012 at 11:43 IST

Very nicely written article. I also read "Setting hounds on the watchdog" - which helps us understand the role and mandate of of CAG and PAC.
But once again we get to hear the same defence from a weak PM - "Will resign if allegations against me are proven". So the PM wants us to carry on as normal, just because he is not involved in this scam? But what about other ministers and industrialists who benefitted from this at our expense

@Sunil Kumar: PM has pre-judged the outcome of PAC findings, completely undermining CAG report and its authority. Where is the doubt and what benefits should be given in such circumstances?
Whosoever leaked the report to media, should be investigated and punished but does that takeaway the issues raised with the allocation process which was not based on a clear policy, but based on personal fiefdom of few. Loss may not be to the tune of 180K crore as initially calculated by CAG, may be JUST 1 or 2K crore, does that mean we ignore everything and move on?

from:  Navin Sharma
Posted on: Sep 5, 2012 at 09:09 IST

Mr. Era Sezhiyan's articles are always full of anecdotes and references to historical events and are very informative and thought-provoking. While one may not always agree with his views, it is nonetheless educative to read his views. One of the best reasons to read The Hindu!

from:  Vaibhav
Posted on: Sep 5, 2012 at 08:55 IST

Thanks for publishing this excellent, timely and praiseworthy article by Era Sezhyan. It should serve as an eye opener to the current parliamentarians. I salute Dr. Prasad, Dr. Radhakrishnan and Pt. Nehru for bold stands to defend CAG. It is the duty of CAG to bring out the deficiencies in the working of the govt. by way of expenditure or earnings. Finally, hats off to Mahavir Tyagi for boldly holding up the CAG case. And thanks to Era for enlightening the likes of me who did not read these great sayings in the past.

from:  Krishna
Posted on: Sep 5, 2012 at 06:29 IST

Would you give PM a benefit of doubt, when he said that PAC will challenge, (automatically, as he believes that the allegations are disputable). Please don't forget that the CAG report has been leaked before it reached to PAC, which itself is a matter of concern? Who did it and why, is not much of doubt!

from:  Sunil Kumar
Posted on: Sep 4, 2012 at 17:56 IST

It is saddening to know that the very authority and credibility of CAG,a constitutional body was doubted by the executive. it is undermining and degrading the very purpose of our constitution.

from:  aneel.sb
Posted on: Sep 4, 2012 at 17:52 IST

Mr Sezhiliyan is very right that PM of India should not deride another Constitutional body set up by our forefathers to put a check what these politicians do with the national resources and money contributed by one and all as taxes. With the service tax bill, UPA has not spared even the poorest of the poor from taxes and they should know where their money is going to. Manmohan does not have the courage to control or check his ministers nor the guts to oppose his political boss,Sonia Gandhi in matters of public interest, but it is pathetic to see him pooling up all the strengths to attack constitutional bodies like Judiciary or CAG who job it is to put checks on his government's profligacy to favor his fellow politicians and Corporates without any accountability to the people of India whose money he is expected to protect. As Sezhilian righly said, his zero performance as head of Govt and his Zero loss ministers cannot be expected to equal Prasad or Radhakrishnan and their greatness.

from:  MvjRao
Posted on: Sep 4, 2012 at 17:39 IST

Mr. Era Sezhiyan's comments on PM statement before the press meet on CAG report is praiseworthy. Mr.Sezhiyan has given very nice report about the role of CAG envisaged by our founding fathers.It is pity the present PM and his ZERO ministers are up in the arms against the CAG report.We dont think and expect CAG report's are biased.It appears our present ministers ,PM and babus are incapable to deal or handle with such very large and huge amounts and inturn are amassing wealth for themselves or allowing very few intelligents to grab the major share of the money that is involved by manipulation of loop holes in the ZERO administrative system of our country.Unfortunately there is no law for inefficiency and procrastination leave alone ineffective laws for corruption. Let us hope things will change. Until that time many of us to prepare for sufferings due to our great present PM and his host of ineffeicient ministers

from:  Jagannadha Reddy
Posted on: Sep 4, 2012 at 17:05 IST

Style of functioning of both central and West Bengal government is almost the same in so far as both the governments steamrolls public and opposition parties opinion.PM says in advance what would the PAC report coalgate scam would be when this committee complete its report on CAG.West Bengal government says in advance what the outcome of rape case enquiry would be.

from:  Anil Kumar Choudhury
Posted on: Sep 4, 2012 at 15:13 IST

Hope goverment understands it and add some sense and accountability to their behaviour.

from:  Prashant Gadekar
Posted on: Sep 4, 2012 at 11:38 IST

what a brilliant article by Era Seziyan! seriously where had those days
gone ? where both President and Vice-president are in the arm of congress,
nothing can be expected from them.

from:  sanjay
Posted on: Sep 4, 2012 at 10:42 IST

The statement of challenge to CAG made by PM is not appropriate as there can be better ways of conveying the same thing. Govt should look at the CAG report with utmost care.The debate should definitely happen over CAG report but they must not be indulging in petty blame game. CAG should be seen as a good brother rather than targeting it like an enemy. After all everyone here is a part of our Constitution.

from:  Saquib Khan
Posted on: Sep 4, 2012 at 10:40 IST

This is a wonderful article, especially for a youngster like me with
limited knowledge about how constitutional bodies work , especially
how they interface with other constitutional bodies. I was especially
pleased to learn about how Mr. Mahavir Tyagi lead PAC during Nehruvian
era. Governments which aspire for faster economic growth should
understand that checks and balances incorporated by constitutional
body like CAG will definitely impact the desired pace. The solution to
this should not be making amends to existing legislation , but to
build efficiency in administration to be pro active in designing their
growth path while taking the check and balances into consideration.
Even if growth slows down its fine, as long as credibility is upheld.

from:  Ramachandra
Posted on: Sep 4, 2012 at 10:33 IST

Well written ariticle. The famous parliamentarian Shri Era Sezhiyan's words should get into the hearts of the officers in PMO office New Delhi.

from:  VARADARAJAN ELLISNAGAR
Posted on: Sep 4, 2012 at 10:25 IST

It would be better for the PM to remain silent as usual rather than say something like what he
said about the PAC challenging the CAG's observations on coal block allocations.

from:  K.Vijayakumar
Posted on: Sep 4, 2012 at 08:04 IST

I would like to thank Mr. Sezhiyan for this timely piece. As coherently argued in this article, PM is definitely leading from the front (for a change- he is displaying leadership trait) to castigate CAG instead of taking the findings seriously to introspect and implement measures to stem the rot. It is naive to expect current political dispensation (president included) to intervene and remind nation of the constitutional sanctity & imperative of CAG.

from:  abhijeet
Posted on: Sep 4, 2012 at 07:56 IST

The right to clear the objections of the CAG lie with the government
through whatever means. Hence, comments by MMS are not wrong.What the
CAG has pointed out is not the final.

from:  P.Tauro
Posted on: Sep 4, 2012 at 07:29 IST

MMS simply meant that congress members in PAC will play hoolingism
and not let PAC function or issue Report as done in Case of 2G.

from:  Atma Gandhi
Posted on: Sep 4, 2012 at 07:12 IST

Thank you Mr. Sezhiyan for writing such a revealing article about the dangerous
levels of unaccountability that our current democratically elected government is
functioning on. Putting it in a historical perspective, like you very lucidly do, there
is no doubt of the obvious decay in our political system. Despite already being
embroiled in the 2G spectrum allocation scam, and now the coal block allocation
controversy, makes me wonder how many more fallings can be accepted before
any ruling government is forced to resign for its administrative debacle? Should
there not be any constitutional mechanism, other than vote of confidence, by
which any failings of a ruling government, specifically in corruption, would
automatically lead to dissolution? High time to amend our constitution to include
such mechanisms.

from:  Ashok Gazula
Posted on: Sep 4, 2012 at 06:59 IST

Every word written by an auditor cannot be considered as sacrosant. Auditee has every right to contest and challenge the contentions of auditors, which does not mean showing disrespect to the office of the auditor. In democracy no authority is supreme and there has to be checks and balances. Standing Committe of the Parliament is the forum where auditor's contentions can be challenged. There is nothing wrong in what Mr. Manmohan Singh has said. CAG has worked out gains to private parties based on coal reserves allocated (extractable in say next 25 years) and the profit margin enjoyed CIL. This method does not take into account discounted value of future cash flows. Further, the assumption is that CIL's profit margins would the lowest. This is not necessarily true. Finance charges and equipment hiring charges can reduce margins for a new entity. CIL is not able to achieve desirable growth rate in coal production. This basic issue is not addressed by allowing captive mining of coal.

from:  Pramod Patil
Posted on: Sep 4, 2012 at 06:53 IST
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