To be truly independent, this institution must be freed from both governmental control and political bias
Many recent reports of the Comptroller and Auditor General of India (CAG) have highlighted grave discrepancies in government expenditure and deliberate distortions of stated policies. These reports and their aftermath demonstrate the true potential of the office of the CAG to force action against corruption. As the custodian of the public purse, it is one of the key actors in the system of checks and balances envisaged under our Constitution. In fact, today the CAG is likely the most important functionary responsible for ensuring accountability of the government.
However, the CAG can do justice to this role only if he is competent, independent and suitably empowered. Sadly, the current framework compromises this, leaving room for abuse in appointments, as well as limiting the CAG's authority to effectively perform his constitutional duties. This is particularly important now, as the appointment of a new CAG looms on the horizon.
The CAG's appointment pro-cess is a legacy from the pre-Independence 'not-accountable-to-Indians' mindset, whereby it is entirely at the government's discretion. Given the governing coalition's exasperation with the incumbent, it is probable that this time around it will look for someone who is likely to be favourably inclined towards the government, or at the least be ineffective.
This stratagem has already been exposed in making even those appointments which provide a role for the opposition. In the 2010 appointment of the chief vigilance commissioner (P J Thomas) and this month the National Human Rights Commissioner, the government simply bulldozed the process, totally disregarding the dissent notes by the leaders of the opposition. That was possible because, even in these more modern, democra-tic institutions, the intent of checks and balances in appointments is defeated by providing the government the upper hand.
In order to be truly independent, the CAG — not to mention other institutions like the CVC and NHRC — must be free from both governmental control and political bias. Sadly, even at the highest levels of government there does not seem to be any acceptance of the need to bring in changes.
To ensure that the independence of the CAG does not depend on the morals of the government of the day, his appointment should reflect real checks and balances. My formula would have the CAG appointed by a committee consisting of the Speaker, the prime minister and the two leaders of the opposition in the Lok Sabha and the Rajya Sabha. Their choice should be by simple majority and, in the event of a tie, it should be referred to the Chief Justice of India to cast the deciding vote.
Reforming the CAG must not end with the appointment pro-cess. There is an urgent need to amend the Audit Act that governs the working of the CAG. The most important changes must include: Bringing contractual agreements and public-private partnerships (PPPs) within the CAG's ambit; giving statutory backing to 'performance audits'; penalties for not responding to information requests from the CAG in time; and time-bound laying of CAG reports in the legislature.
In recent years, the role of the government has been considerably redefined. It is now increasingly partnering with the private sector. Many infrastructure projects are now undertaken in the PPP mode, involving transfer of public assets (for instance, oilfields) and revenue sharing between the government and the private sector. Many of these newer structures are presently outside the ambit of the CAG. This reduces oversight and creates avenues for corruption. Therefore, the scope of the CAG's powers must be expanded to include such arrangements.
However, we should be careful not to overreach. The expanded remit of the CAG must not deter participation of the private sector. Private enterprises are likely to be wary of excessive intrusiveness in their decision-making processes, and rightly so.
A solution to maintain a balance would be to empower the CAG to audit only those transactions that are primarily related to specific agreements between the government and private parties to ensure that the government's share in revenue or profit is protected. By limiting the scope of the audit, this provision would shield private players from undue interference.
The CAG should also be explicitly empowered to conduct 'performance audits'. This form of audit allows the auditor to question government decisions to check for wastage of public money. Performance audits were used by the CAG for the reports on the Commonwealth Games and theallocation of 2G spectrum, among others. These highlighted drama-tic incidents of malfeasance that mere accounting exercises would not have been able to unearth.
Next, there ought to be penalties for delaying information asked for by the CAG, which should also be armed with search and seizure powers. And finally, it must be mandatory for the government to lay the CAG's reports in Parliament or the state assem-bly within seven days of its sitting. Currently, governments often delay the tabling of reports which are politically inconvenient.
I have recently submitted two private members' Bills in the Lok Sabha in support of these measures. I recognise that private Bills haven't been passed by our Parliament in decades. Nevertheless, they serve as useful tools to build awareness, gather public support and pressurise the government. The new CAG is scheduled to be appointed in May. There is no time to lose.
ADMIN: LAV
Many recent reports of the Comptroller and Auditor General of India (CAG) have highlighted grave discrepancies in government expenditure and deliberate distortions of stated policies. These reports and their aftermath demonstrate the true potential of the office of the CAG to force action against corruption. As the custodian of the public purse, it is one of the key actors in the system of checks and balances envisaged under our Constitution. In fact, today the CAG is likely the most important functionary responsible for ensuring accountability of the government.
However, the CAG can do justice to this role only if he is competent, independent and suitably empowered. Sadly, the current framework compromises this, leaving room for abuse in appointments, as well as limiting the CAG's authority to effectively perform his constitutional duties. This is particularly important now, as the appointment of a new CAG looms on the horizon.
The CAG's appointment pro-cess is a legacy from the pre-Independence 'not-accountable-to-Indians' mindset, whereby it is entirely at the government's discretion. Given the governing coalition's exasperation with the incumbent, it is probable that this time around it will look for someone who is likely to be favourably inclined towards the government, or at the least be ineffective.
This stratagem has already been exposed in making even those appointments which provide a role for the opposition. In the 2010 appointment of the chief vigilance commissioner (P J Thomas) and this month the National Human Rights Commissioner, the government simply bulldozed the process, totally disregarding the dissent notes by the leaders of the opposition. That was possible because, even in these more modern, democra-tic institutions, the intent of checks and balances in appointments is defeated by providing the government the upper hand.
In order to be truly independent, the CAG — not to mention other institutions like the CVC and NHRC — must be free from both governmental control and political bias. Sadly, even at the highest levels of government there does not seem to be any acceptance of the need to bring in changes.
To ensure that the independence of the CAG does not depend on the morals of the government of the day, his appointment should reflect real checks and balances. My formula would have the CAG appointed by a committee consisting of the Speaker, the prime minister and the two leaders of the opposition in the Lok Sabha and the Rajya Sabha. Their choice should be by simple majority and, in the event of a tie, it should be referred to the Chief Justice of India to cast the deciding vote.
Reforming the CAG must not end with the appointment pro-cess. There is an urgent need to amend the Audit Act that governs the working of the CAG. The most important changes must include: Bringing contractual agreements and public-private partnerships (PPPs) within the CAG's ambit; giving statutory backing to 'performance audits'; penalties for not responding to information requests from the CAG in time; and time-bound laying of CAG reports in the legislature.
In recent years, the role of the government has been considerably redefined. It is now increasingly partnering with the private sector. Many infrastructure projects are now undertaken in the PPP mode, involving transfer of public assets (for instance, oilfields) and revenue sharing between the government and the private sector. Many of these newer structures are presently outside the ambit of the CAG. This reduces oversight and creates avenues for corruption. Therefore, the scope of the CAG's powers must be expanded to include such arrangements.
However, we should be careful not to overreach. The expanded remit of the CAG must not deter participation of the private sector. Private enterprises are likely to be wary of excessive intrusiveness in their decision-making processes, and rightly so.
A solution to maintain a balance would be to empower the CAG to audit only those transactions that are primarily related to specific agreements between the government and private parties to ensure that the government's share in revenue or profit is protected. By limiting the scope of the audit, this provision would shield private players from undue interference.
The CAG should also be explicitly empowered to conduct 'performance audits'. This form of audit allows the auditor to question government decisions to check for wastage of public money. Performance audits were used by the CAG for the reports on the Commonwealth Games and theallocation of 2G spectrum, among others. These highlighted drama-tic incidents of malfeasance that mere accounting exercises would not have been able to unearth.
Next, there ought to be penalties for delaying information asked for by the CAG, which should also be armed with search and seizure powers. And finally, it must be mandatory for the government to lay the CAG's reports in Parliament or the state assem-bly within seven days of its sitting. Currently, governments often delay the tabling of reports which are politically inconvenient.
I have recently submitted two private members' Bills in the Lok Sabha in support of these measures. I recognise that private Bills haven't been passed by our Parliament in decades. Nevertheless, they serve as useful tools to build awareness, gather public support and pressurise the government. The new CAG is scheduled to be appointed in May. There is no time to lose.
ADMIN: LAV
Excellent Post, It’s really helpful article
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