CAG: Rai was a whistleblower and conscience keeper Will His Successor Be The Same?

On May 22, when UPA-2 celebrated its fourth anniversary—and its ninth since it came to power in 2004—many in the Congress-led alliance would have also heaved a sigh of relief. For on that day, Comptroller and Auditor General of India Vinod Rai completed his tenure and vacated his spanking and spacious office for his successor S K Sharma, former Defence Secretary.

The years of Rai’s tenure were perhaps the most eventful for him and the most tumultuous for the Manmohan Singh government. Under him, the 153-year-old CAG presented a determined and even aggressive front by coming out with a series of reports which exposed corruption at various levels of government, including in the Commonwealth Games, the allotment of second generation spectrum licenses and coal blocks, the award of contracts to exploit natural gas reserves and the lapses and failings in defence procurements. It has also audited the latest scam to hit the government—the controversial Rs 3600-crore deal with AgustaWestland for supplying 12 VVIP helicopters for the Indian Air Force.

These reports sledge-hammered the government and its image and gave ammunition to the opposition, creating a political turmoil both in Parliament and in the Public Accounts Committee which scrutinises its findings. They led to a spate of CBI cases, arrests and resignations including that of A Raja as telecom minister. The report on 2G did not even spare the Prime Minister whose student Rai once was in the Delhi School of Economics.

But will Rai’s departure really spell relief to the government?

Not quite. For Rai has set in motion a process that cannot be halted—unless it is done brazenly.

Unlike in the past, there is now a keen public and media interest in the issues raised by CAG. There is a greater demand for accountability now. The contents of the report—particularly on the presumptive loss of Rs. 1,74 lakh crore over the allocation of 2G spectrum licenses and the losses in coal blocks allocation generated an intense debate on the role and mandate of the institution, with many in the government alleging that CAG was exceeding its brief while the country’s supreme auditing body repeatedly maintained that it was only performing its duty and its loyalty lay with the Constitution.

Congress leader Digvijaya Singh has been among those who took potshots at CAG, alleging that he had a political agenda like one of his predecessors T N Chaturvedi who gave a report on the Bofors issue—which led to the Rajiv Gandhi-led Congress losing the general election in 1989—and then went on to join the Bharatiya Janata Party and become an MP and then governor.

Notwithstanding the attacks and speculations that he may join politics, there is no doubt that Rai had brought the CAG into focus much like T N Seshan had as Chief Election Commissioner redefined the status and visibility of the Election Commission as a strong and independent body which cannot now be reversed. Rai admitted, in his latest interview to a national daily, “For anybody sitting in this chair henceforth, there will be pressure on him or her to deliver.’’ Clearly, CAG is no longer what it used to be before Rai stepped into the office in January 2008. People now see it as a whistleblower and the nation’s conscience keeper. The office would like itself to be seen as adversial in its relation with the government where auditing is concerned — but without being negative.

Indeed, 2006 may have in a way marked a water-shed in how the government and CAG began to function and view each other, with the implementation of the right to information demanding greater transparency and accountability from the government in its dealings. This coincided with the social and political churning taking place in the country which saw people coming out on the streets, taking centre- stage, demanding to be heard and holding the government accountable for its decisions.

In his speech in February 2012 at the Harvard Kennedy School in the US—for which he was slammed by some Congress leaders—Rai underlined that the distinct paradigm shift in civil society in India demanded also a distinct paradigm shift in the model of governance as well as in the objective and approach of public auditing.

“The question that continues to repeatedly arise in our minds is whether the Parliament, and in fact, the public at large, expect us to be mere accountants and do arithmetic over government expenditure? If it was so, then why should constitutions worldwide appoint such high dignitaries as Auditors General and give them independence, freedom from the executive and accord them a constitutional position. Evidently what was envisioned in the constitution was more than expecting them to be mere accountants,’’ he told the gathering, making it a point to repeat this argument in his interactions with the media.

Accordingly, Rai added: “We now premise our audits on the firm belief that we are as much engaged in the business of upgrading governance as any other agency in the administration. We do not subscribe to the WE-THEY concept.’’ He argued that the “challenge is to be a change agent’’ and sensitise public opinion on audit observations especially with regard to audits on social sector impacting people’s lives.

CAG’s Unfinished task

Since the CAG can audit the finances of government departments only, it has been asking for an amendment in the Duties, Powers and Conditions Act of 1971 so that its mandate is enlarged to keep track of the changes that have been taking place in the nature, scope and ambit of governance and expenditure across sectors. When the Act came into being, there were, for instance, no public private partnerships (involving transfer of public assets and revenue sharing), no 73rd and 74th amendment so no panchayati raj institutions existed and no programmes like Sarva Shiksha Abhiyan. There were hardly any NGOs either. But a lot of funds are transferred by the government to such institutions and schemes. As the mandate of the CAG does not cover these, it made several representations to the government to amend the Audit Act. It pointed out that about 63 per cent of the central sector plan fund estimated to be over Rs 54000 crore three years back —fell out of the ambit of audit and remains unaudited.

Among the proposed amendment is also a time limit for tabling a CAG report in Parliament lest the government delay it because it may be unfavourable. It also suggested that the information that CAG seeks from the government/ministries should be provided within 30 days as is done in the case of RTI applications so that it can prepare its reports within a few months and not over several years as was the case earlier.

Three years back there was some indication that the government was considering to bring a bill to amend the Act to enable the auditor to review the accounts of panchayats, NGOs and flagship schemes. But much has changed since then. The first of the major CAG reports on 2G spectrum allocation put the government on the back foot. With each report of an alleged scam, the conflict between the government and CAG intensified so much so that the issue of amending the Act went into the background. Instead, at one point, there were even reports that the government could consider making CAG a multi-member body—a move that would require a constitutional amendment for which the UPA did not have the necessary numbers in the Upper House of Parliament.

The New CAG

Rai’s successor, Sharma will have his hands full. Indeed in a curious turn of events, Sharma, as CAG, will have to audit some of the deals that he had cleared during the 10 years he was in the Defence Ministry. CAG—which had made serious observations on the procurement policy of the Defence Ministry—has scrutinized allegations of irregularities in the purchase of 12 VVIP choppers for the Indian Air Force in the Rs 3500-crore deal with AgustaWestland, a UK-based subsidiary of Italian firm Finmeccanica. The CBI is also probing allegations of possible kickbacks for the deal in which 11 persons have been named as accused including former Air Force chief, Air Chief Marshal (retd) S P Tyagi. It is also looking at other defence procurement deals.

Sharma will be on test in his new role. But the attack on him has already started. Senior advocate and Aam Aadmi Party member Prashant Bhushan charged that Sharma’s appointment constituted a “conflict of interest”, lacked transparency and was “illegal and unconstitutional’’. “Will he conduct a fair audit of the purchases cleared during his tenure?” Bhushan said, adding that “such a long period for a bureaucrat in the same Ministry is unusual.” He accused the government of weakening the watchdog institutions by installing “weak” people in the job, questioned the opposition’s “silence” on the issue and said that his party would “seriously consider” challenging Sharma’s appointment in court. The heat has been turned on and the new CAG would be under scrutiny and under pressure to deliver.