The persistent campaign to discredit the Comptroller and Auditor General of India and weaken the institution appears to be succeeding, and one that evokes dismay.
The relentless campaign to discredit the Comptroller and Auditor General of India (CAG) and diminish the institution is continuing. One is not surprised; this has happened before, for instance in the Bofors case. However, one is dismayed because the campaign, unwittingly aided by some elements in the media, seems to be succeeding to some extent. It seems urgently necessary to dispel certain doubts and misperceptions before they gain ground and cause more damage. This article will attempt to clarify a few points, particularly those not covered in the author's leader page article in The Hindu (“Getting to know the abc of CAG,” October 25, 2011). It will do so in a question and answer format.
Q&A
1.Has the CAG been ‘summoned' and ‘questioned' as a witness by parliamentary committees?
Summoning and questioning the CAG would be similar to summoning and questioning the Chief Justice of India or a judge of the Supreme Court. It cannot happen, and does not seem to have happened. As far as one knows, the CAG appears to have voluntarily offered to make power-point presentations to the Joint Parliamentary Committee (JPC), and the presentation seems to have been followed by the usual Q&A session. One is not privy to what happened at the JPC meeting. If in fact there was any aggressive or adversarial questioning, one can only deplore that as unfortunate; but there is no basis for any such supposition. In so far as the Public Accounts Committee (PAC) is concerned, there is no need for it to “summon” the CAG or even request his presence, because the CAG is duty-bound to assist the PAC and will in any case be present at its meetings, virtually as a part of the committee.
2.Can the CAG's numbers and inferences be questioned?
The CAG, like all human institutions, is fallible; it can commit errors, just as the Supreme Court's judgments can sometimes be wrong. The CAG's reports can of course be questioned, just as the Supreme Court's judgments can be criticised; but with the same care, respect and circumspection.
3.Was it right on the part of the CAG to calculate a ‘presumptive loss'?
If, in a given case, the decisions and/or procedures seemprima facieopen to question, and there is no evidence of the financial implications having been taken into account, but at the same time it is not possible to calculate those implications precisely, there are two options.
The first is to make a mere bland statement that the decision taken or the procedure followed is questionable; the second is to try and make a rough assessment of the financial implications or ‘presumptive loss' through an indirect method. The first option will give Parliament and the general public no idea of the seriousness of the case; they will not be able to form a judgment on whether they are looking at a major or minor matter. The second option will alert them to the seriousness of the case. If ensuring accountability is the objective, the second seems the right course. It must of course be accompanied by a suitable caveat. That is what has been done in the 2G report.
4.Were there internal differences within the CAG's organisation? If so, was it right on the CAG's part to overrule the DG of Audit?
The answer to this has to be threefold:
(a) In any bureaucracy, the superior level approves or rejects or corrects proposals or drafts emanating from the subordinate levels; there is nothing unusual in this.
(b) Under the Constitution, there is only one CAG of India; the constitutional status of the Directors-General, the Accountants-General, and the entire Audit Department derives from the constitutional status of the CAG. The CAG is entirely within his rights in overruling the DG (if that is what has been done), correcting his numbers, and giving him instructions. There is no sense in asking “who is right, the DG or the CAG?” The DG has no separate existence apart from being a part of the CAG's organisation. The final decision is that of the CAG, and the responsibility for it rests with the CAG.
(c) In all cases, an audit objection passes through several stages of examination, checking, review, etc, both internally within the Audit Department and externally in correspondence with the audited organisation. Not only does the ministry or department or other organisation under audit get several opportunities for explanations and corrections, but the proposed audit comment also travels up and down between the field office and the CAG's headquarters several times, undergoing corrections, revisions, etc. Extraordinary care is taken to ensure the accuracy of facts and the defensibility of the arguments in an Audit Report. The point of this explanation is that the formulation and finalisation of the 2G report seems to have followed exactly the same course as is followed in all other cases.
5.Did the Chairman of the PAC telephone or write to the CAG's office inquiring about the 2G report? If so, was this not a case of pressure on his part?
This is an extraordinary charge. Considering the close working relationship between the CAG and the PAC, there is hardly anything strange about telephonic or other communication between the two. If the Chairman of the PAC inquires as to when the audit report on a certain subject is likely to become available, can that be considered an improper inquiry? As for “pressure,” it is grossly improper to make any such allegation, but apart from that, what pressure can the Chairman of the PAC in fact exert on the CAG? Is it being seriously suggested that the Chairman of the PAC wanted a certain kind of report to be written, and that the CAG, an independent constitutional functionary, was ready to produce a report as instructed?
6.What about the allegations of RSS connections?
This is a smear campaign unworthy of serious notice. It deserves to be dismissed with contempt.
Keywords: 2G spectrum scam, Comptroller and Auditor General, CAG report, political corruption, Public Accounts Committee, accountability, CAG, PAC, Indian quasi-federal system, 2G case
I am saddened that many of the above commentators are missing the point. Presumptive loss is perhaps a questionable method but what needs to be understood is the 2G loss is real and Anshul has the correct perspective. Its a coterie that orchestrated the loss thanks to wheeler dealers looking out for a quick buck. What the CAG did was to bring it up above the water! Now to turn around and find procedural improprieties is to say the least very misguided :-)
q&a format has revoked many missconceptions as i had about cag. i wish
to be ahonest body so that we can hope to curb the monster of coruption
in indian society .
Thank you very much Mr. Ram for printing such an informative report. Mr. Rai, I am with you, because it is for the first time that I came to know about the power of the CAG.
The presumptive loss was up to Rs.4.19 lakh crores but CAG finally satisfied himself to put it at Rs.1.76 lakh crores. This is a huge climb down! The speed and the methodology with which the UPA-2 swung into action to cover up the 2G scam is unparallelled in history. This is ample proof to vindicate the CAG that the losses to exchequer is indeed huge. Media playing to the diktats of UPA-2 is indeed a sad reflection on section of the Fourth Estate, and it's role also need scrutiny and accountability. The people have lost faith in the Fourth Estate by these biased views and voicing their opinion to make them accountable. CAG as an independent constitutional authority had done exemplary national service in bringing out the corruption in the 2G spectrum allocation. It is unbecoming of a section of the Fourth Estate to show the institution of CAG in poor light.
Lot of hue and cry is going on about the institution which has recently celebrated its existence of 150 years. In spite of all the smear campaigns against the CAG the truth will always triumph and the institution will continue to glory for the betterment of the country and uphold the constitutional duty at the highest level
It is indeed a very well reasoned and written article.In today's murky press and even more so with the news television channels presenting topsy turvy views on any and all subjects without even understanding the basic facts Mr Ramaswamy's views have come brilliantly.I have been reading The Hindu for over sixty years,a habit which I picked up from my grandfather to improve my English language.As kushwant singh has said this is the only news paper worth reading in today's messy world.Thank you.
Here goes the apologist for the CAG again . I am glad , this time more commentators have disagreed with the somewhat contrived justification for putting out a figure of presumptive losses.For example, I could have invested all my Terminal Benefits in 1995 of Rs 5 Lakhs in stock markets when the BSE Sensex was 4500 . It reached its peak of 21000 in 2008 when my cash assets would have been Rs 23 lakhs ( leaving aside Dividends) . However, I chose to deposit in PO. With average 8.5% interest even compounding annually I had only Rs 15 Lakhs in 2008 and therefore my wife , my Vinod Rai, wrote an audit report against my investments which resulted in a loss of Rs 8 Lakhs. She has legitimately fixed my loss at Rs 8 Lakhs. However, today with Sensex at 16000 my assets will be Rs 16 lakhs and the loss will be only Rs 1 lakhs. But the fact is , I had no cash loss. Therefore the opportunity loss could be anywhere between zero and Rs 8 lakhs or even more depending on my wife's.
It is heartening to see that there are certain straight voices, trying
themselves to be heard in an era of managed and paid news. Congrats for
the approach.
The people commenting the presumptive loss must read the report first and go through the facts. i believe hardly 10 percent or even 5 percent of the people commenting/criticizing the CAG have gone through the CAG reports
@Rajesh : The logic was pretty simple and the presumptive loss figure is a conservative on to say the least. I would give an analogy: suppose i start a company which has nothing of its own, no technology, no infrastructure but only a registered company name and an office. Now I buy spectrum for X Rs., a few days after that some international company buys 50% share of my company for 5X Rs. Technically everything is fine as I have only sold the shares of my company and not the spectrum but then what else did my company have except spectrum. So this means the actual market cost of spectrum would be 10X Rs. This is the same way how CAG has come to a conclusion of the presumptive loss.
I fully endorse the view of Mr. Anand Mohan. Telecom pricing theory is a contentious subject worldwide and Nobel laureates have failed at it spectacularly; see, for example, the 3G spectrum auctions in Europe around the turn of the century. What bothers me more is that the computation of loss or gain is not done by the CAG from the point of the consumer surplus; i.e. what would the consumer net gain have been if the spectrum was auctioned and as a consequence call rates went up to Rs. 2/- per minute. The CAG's sole preoccupation seems to be the maximization of govt. revenue. If the CAG is a constitutional body, then its duty is to the common public, not the government; presumptive loss or gain should strictly be from the consumer's point of view, both as a consumer of govt. services __and__ as a consumer of telecom services.
No doubt the author has nicely put an analysis in a question and answer format. But it has not satisfactorily passed the muster regarding ability of auditor to assess and report presumptive loss figures in peculiar circumstances. How can an auditor assess with reasonable accuracy the presumptive loss which may have arisen out of auction of spectrum (or say a new technology) when price discovery mechanism for such a product world wide has not been determined by play of market forces. For example, the pricing of natural gas in india, pricing of shale gas in USA (which has been recently marketed), the prices on such products at the initial stages are determined by so many other factors rather than the auditor just doing back mathematical calculations. Further, if CAG is constitutional authority and one should exercise care while criticing then it is also the duty of CAG to base his judgment on logic rather than on sheer assumptions.
I highly appreciate both 'HINDU' and Mr.Ramaswamy R. Iyer for the 'Eye opner'present in HINDU regarding the roles, responsibilities and functioning of 'CAG'.I am proud to be a regular reader of THE HINDU, because whenever the smear campaign orchestered by the vested media and grudged political parties against our honest bureaucrats and constitutional authorities, HINDU took no time to give fitting reply to them. In this case also HINDU exposed that, it is clear cut managed show by the Congress party to defame the present CAG and cover up the 2G case once for all.
There is a difference in overruling and putting pressure on someone to sign on dotted lines. The later is an offence. It is also important to know how the loss was arrived at. The CAG must be accountable. CAG is not a source of gospel truth. It is particularly important to know how the reports were leaked to the media before they were even presented to the relevant authority.
Has PAC in the past ever made such contacts and such calls as have been revealed in this case. Isn't it the right of the citizen to know about this as well. We must have all the organs of the governance functioning properly. Impropriety is not limited only to the elected representatives. It applies to all. If CAG is guilty ( and only if it is guilty) then law and proper procedure should apply in this case as well.
What about the particular logic used to arrive at the 'presumptive loss'. Isn't that the point of contention?
The editorial is misleading.If consultation between the PAC and CAG is so normal and routine, why did Mr Sinha in his internal report tell Mr Joshi that he needed to get permission from the CAG, in response to Joshi's request to be briefed about the report.And what about the new internal note , which mentions that loss calculation method has been changed in response to request from members of the PAC.If the internal notes of the CAG are genuine, it is clear that the PAC did try to influence the CAG report.As a responsible nationl daily,please don't mislead readers.
I totally disagree with the article. It was completely inappropriate of M M Joshi to be be talking to the CAG before the submission of the 2 g report.It is very clear that he had an interest in the hastening of the report and exaggerating the loss.His Unease before the press seemed to confirm suspicions.It also explains why he wasnt in favour of the JPC. I guess the truth will come out.This docent exonerate the government but shows the BJP in very poor light.
Please Email the Editor