In an exclusive interview to The Hindu on the sidelines of an audit event in Jaipur on Saturday, Comptroller and Auditor General Vinod Rai reflects on his tenure and answers the criticism that has been made of the CAG’s recent reports on 2G and coal.
After an eventful five years, your tenure is coming to an end this month. A criticism that some in government have made is that your reports have strayed from the path of auditing and begun to question policy.
We have never commented on policy formulation. In April 2008, immediately after I took over as CAG, I addressed senior civil servants and explained that auditors and those in the administration are on the same side. There should not be any ‘we’ and ‘they’ relationship since both of us are engaged in the job of ensuring good governance.
The executive implements government policy and our job as external auditor is to audit the government’s expenditures and implementation of policies, post the events. We believe that we are as much in the process of upgrading governance as anybody else is. We do not question policy. We only audit implementation.
I think it is an entirely incorrect perception that at any point we have questioned policy prescriptions or formulations. If you read 2-3 of our performance audit reports recently, in the introductory part itself we have said that policy formulation is the sole prerogative of the executive. We recognize that and respect it. What we audit is the implementation of that policy. Also, at times we have tried to see in the course of our audit whether that policy is suboptimal.
We have never taken on the role of policy formulation or even questioned policy formulation. We just audit the implementation of policies and not a single instance has been pointed out to us where we have questioned policy. Yes, we may have compared policies formulated by the government just to find out sub optimality.
There has also been some criticism of reports being leaked to the media.
Auditing goes through four or five layers. The first level of audit is when we make basic queries. Those questions cover a whole gamut of issues. The answers come, and at that stage, 80 per cent of what we ask is dropped because the answers satisfy us.
Now, at that stage if someone makes an RTI application about what the questions asked were and if we release those queries, these would give a very incorrect picture. This is because the media does not see the answers and that is where it becomes slightly misleading. If you ask me, in hindsight, I would like to suggest to government and Parliament that since we prepare reports for presentation to Parliament, thus anything that we do leading to the presentation should come into the public domain only after this has been done.
This is mostly because at the intermediate stage if any of this is seen by the public it is half baked and may give a very incorrect position.
The media being the media may want to sensationalise some issues and thus sometimes you have instances where out of context issues create headlines.
Another charge is that the audit process has made officers fearful of taking decisions, has led to policy paralysis.
To argue think that our audits have become a stumbling block to decision-taking is a bogey. It’s an alibi for non-performance because those in the bureaucracy who are dynamic and take decisions in good faith have always done so and come out unscathed.
An audit does not fault a person who may have gone wrong because he or she is exercising judgment every other day and acting in good faith. If something is premeditated and is an act of commission for a benefit, then certainly it is a vigilance issue and we point it out.
Some critics have asked why the coal and 2G audits which led to scams being probed deal only with the tenure of the UPA government and ignored what went on during the NDA’s time.
If you look at the spectrum issue, our report points out that the entire spectrum phenomenon had been audited by us. We had audited up to 2002 and thereabouts. The only difference was that they were financial audits or compliance audits and we had not gotten deep into the implementation of policies.
After 2002, when we have taken up this audit, it is a performance audit. In the process of a performance audit, we have gone into the efficiency and efficacy of the implementation of whatever policies the government had formulated. This is the only difference. We picked up a particular Cabinet decision and saw whether it has been implemented or not. That is it.
When different arms of government were seeking a market discovery process, the department concerned did not accept it. When different arms of government were suggesting market indexation, the concerned department did not accept that. Whereas in its own policy formulation two years later, the same department has gone into a market discovery process through an auction. All that we tried to explain is that the concerns of the Finance Department, the PMO, the Law Ministry were all indicating a market discovery process. What has the nation forgone by not following that process? Unlike the government, we are auditors. As I have explained to the PAC and JPC, ‘presumptive’ and ‘potential’ have been used interchangeably in our report. We have used four models to calculate the loss. The quantum or amount of loss can be debated but that there has been loss cannot be denied.
According to Opposition MPs, the JPC draft report uses the testimony of a retired CAG official of ‘dubious credentials’ to prove you wrong. How would you react to this?
I had explained this to the JPC. I must add that the JPC has been very fair to us because they gave us 3-4 opportunities to clarify our position as well as the thinking or process that had gone into the preparation of this report.
I do not want to comment on any officer. Each officer is as good as the other. It is a fact that this particular officer had done the audit and had made the presentation to the Public Accounts Committee of this audit. He may have had an afterthought and wanted to retract, however that is his choice. I do not want to comment on it. As far as we are concerned, we have explained to the JPC very clearly the processes that have been undergone.
I have 40 years of experience behind me in government. I am extremely proud of this department and its robust processes and there is no way in which an individual — even the CAG — can overrule the findings of the department and superimpose his/her own opinions.
We are totally in agreement with the observations of the Supreme Court. The government can decide that a particular national asset has to be made available to the public as a social welfare activity, irrespective of the cost. All we have been trying to do is compare the government’s policy formulations from time to time. We have never said that in the sale/auction of spectrum, revenue should be maximized. We have only said, as has the Planning Commission, that there should be an element of revenue generation not maximization. There should be a balance between revenue generation and maximization.
In the case of coal, we haven’t questioned anything. All that we have noted is that the secretary said the process was opaque, it was leading to windfall gains and these were his exact words. There was lobbying for these licenses and the minister in charge agreed with the findings of the secretary and decided that there should be a process of market discovery. That is all. We have not questioned any of these decisions. We are 100 per cent with the government and the Supreme Court.
What do you feel about the government’s attempt to make the CAG a multi member body like the Election Commission? Will this bring more checks and balances?
The government has been very fair with us. They sought our opinion around three years back, post the Commonwealth Games, on a multimember body. We pointed out that there are three models of supreme audit institutions in the world today. The first is where the audit is a court of audit and it sits as a multimember bench, it has powers that are punitive. It has the powers of the judiciary, like in France. The second is the commission of audit like in Japan. The third is of a single-member body like in the Canada, UK, Australia and NZ, the US. There is a single body CAG assisted by deputy CAGs, depending on the numbers required. Each model has its own advantages and disadvantages so we left it to the government to decide which would be more suitable in our milieu.
You are considered a symbol of the anti-corruption movement. How do you react to this tag?
It is very unfortunate and that is why I said that the media is fond of headlines. Certainly by no stretch of imagination would I like to be called an anti- corruption crusader because that is not what we are. Auditing has a philosophy. Worldwide, the audits run by supreme auditing institutions are meant to hold the executive financially accountable to the legislature. This is exactly what we are doing.
How do you feel about the past practice of CAGs joining political parties or accepting assignments like governorships?
I would not like to comment on any of my predecessors as each one of them is free to have chosen a career path or life beyond being CAG in his own way. As far as I am concerned, lots of people have said that I have political aspirations. I have been apolitical all my life and do not see any reason why I should change into a political person. I would like to remain active in the various fields that I have experience and proficiency in.
