The Role of CAG in Meeting the Challenges of Good Governance

Governance describes the process of decision making and the process by which decisions are implemented (or not implemented). Public institutions like that of the Parliament, the executive and the other constitutional bodies accomplish public affairs, manage public resources, and guarantee the realization of human rights. Good governance accomplishes this in a manner essentially free of abuse and corruption, and with due regard for the rule of law.

With the advent of the Constitution of India in 1950, we vowed to create India, a welfare state, where the elected government would strive to cater to the needs of this geographically and demographically vast nation through equitable and judicious distribution of public resources among the people of the country. Being a welfare state, the government was enjoined with the task to initiate many public welfare policies with magnanimous inputs of finances at its easy disposal. But to curb arbitrariness and to work in accordance with the rule of law, the Constitution of India had provided a mechanism of checks and balances whereby provision for all wings of the government, viz. the Legislature, the Executive and the Judiciary were so designed that they keep a check on each other in case of overstepping of authority or arbitrary exercise of power thus assuring good governance in India. Other than this mutual checks and balance system, the framers of the constitution also provided certain independent authorities, the Comptroller and Auditor General (hereinafter referred to as CAG), being one and prominent among them.

Auditing and accounting have been an indispensible part of government functioning in the history of the world. Auditing and accounting functions of the government have seen many crests and troughs from time immemorial. From the “Pradeshatara” functionary during the Mauryas to the Pratyupariks during the Guptas, the office of CAG evolved only after the advent of the British in India. Office of the King’s Auditor to the Exchequer was ideated in Britain as early as 1314. A complementary position of the Accountant General created after the transfer of power from the East India Company to the Crown saw a transmutation into a statutorily recognized, powerful and independent Comptroller and Auditor General of India under the Government of India Act, 1935 and finally under the Constitution of India in 1950. Limbs and teeth were given to this constitutional functionary through an enactment of the Parliament in 1971.

The Tokyo declaration, 1985 defines the public accountability meaning the obligations of persons authorities entrusted with the public resources to report on the management of such resources and be answerable for the fiscal managerial and the programme responsibilities that are conferred.

The Latin Maxim Lex citius tolerate vult privatum damnum quam publicum malum which means that ‘The law more readily tolerates a private loss than a public evil’ accentuates the importance of the CAG. It is here when the role of an independent financial auditing authority, i.e. a Comptroller and Auditor General in India becomes pivotal in “reporting” on the management of such public resources.

CAG and Good Governance:

According to UNESCAP (United Nations Economic & Social Commission for South Asia & Pacific, Good governance has eight major characteristics; accountability, transparency, Participation, Consensus orientation, effectiveness & efficiency, equitability, inclusiveness, responsiveness, and following the rule of law. To upkeep all these requirements of good governance, the CAG has been constitutionally mandated to augment accountability of the Executive to the Parliament and State legislatures by carrying out audits in the public sector and providing accounting services in the States in accordance with the Constitution of India and laws as well as best international practices. The results of his audit serve the purpose of providing an independent and informed critique of the administrative practices and implementation of the developmental schemes and programs. Today, the CAG’s office has been undertaking more performance audits than before and stress is on not only just on how much money flows out of the exchequer to make a purchase, “but towards the economy and effectiveness of that purchase”. For example, the 2G Spectrum allotment was scrutinized by the CAG who reported it as a loss to the exchequer and not as a corrupt money flow, thus bringing to fore the irregularity in the transaction.

The CAG is required to follow specific standards, practices and guidelines in conducting auditing and reporting. He can engage consultants and/or obtain professional services in conducting audit. He can also consult and collaborate with other countries/SAIs and International Organizations on matters relating to audit. This increases and retains the efficiency and effectiveness of the audit and brings it at par with global best practices.

Ensuring good governance, the CAG is assigned with the responsibility to offer “a financial critique” to the transactions not only of the Central and State Government Departments, but also of Revenue, statutory corporations, autonomous bodies, PSUs etc. The CAG has played important role in bringing considerable revenue for the government by pointing out cases of under assessment of tax, and also assisted in better functioning of tax administration machinery by pointing out lacunae or loopholes and deficiencies in the functioning of tax administration.

The significant findings and recommendations which are expressed in the Reports represent vital inputs to good governance that can lead organizations to take expeditious and suitable remedial actions to cure identified weakness and deficiencies. There are a number of socio-economic welfare programmes and policies initiated by the government for long and short term benefits of people at large. These policies involve channeling of prodigious amounts of money from the public exchequer sometimes ranging from 10-12% of the total budget expenditure in a given fiscal year. The performance audit of these policies by the Comptroller and Auditor General, acts as the guardian of the taxpayers’ money used in such colossal sums.

CAG’s Role in Meeting the challenges of Good Governance:

Having confabulated on CAG’s role in ensuring good governance, it becomes pivotal also to have an insight into the challenges to good governance and the role that the CAG plays to brazen out and vanquish them.

The biggest challenge to Good governance in this 21^st century India is Corruption in almost every sphere of life, in general and in public sphere in particular. Corruption in India is all pervasive. There are very few activities in the nation that are perceived to be free from this malaise. Broadly, corruption in India can be divided into two categories. The first is the grand defalcation where, those in power pouch hundreds of millions in kickbacks in public procurement and in contracts. The second category consists of what might be called petty corruption where the common man pays for the public services to which he is fully entitled. The proactive reports of the CAG on various transactions involving public money is something more than a blessing in disguise. At one side, the legislature and its Public Accounts Committees (PAC) and Public Undertakings Committees (PUC) have desisted paying heed to the seriousness of CAG reports, the CAG reports have been big time revelations for the people of the country at large, on the other. As CAG takes on sensitive issues of high level political and bureaucratic corruption and lack of accountability, his organization turns out to be vulnerable to criticisms of over stepping his competence and even of partisan attitude. Inspite of the recommendatory nature of reports of the CAG and dependency over the PAC and PUC for any action on that, the pressure of the electorate has forced the Government to take stringent actions against those indicted in the CAG reports. This has to great extents created reasonable amount of fear in the minds of those holding and peculating public money.

Generally the CAG does not have an auditing control over the private and corporate sector. But through his vigilant and prompt actions over the transactions by public authorities of alleged favouritism to corporate sector, like those in the KG Basin, the corporate sector has also come under the wakeful scrutiny of the CAG indirectly, which has ensured the strength and independence of this constitutional functionary and has created trepidation for those involved in such transactions.

Another callout to Good governance in a democratic nation like India is growing threat to Constitutionalism. There have been seen subtle instances where the hassles among various constitutional authorities – the legislature, executive, judiciary and other constitutional functionaries such as the CAG have irrated, either due to transgression of jurisdictions or due to inactions on the part of these authorities which have, to an extent, posed a threat to Constitutionalism. In wake of such circumstances, the CAG has stood tall among all by maintaining the constitutional spirit, remaining consecrated to its duties towards the nation and standing as an example to all other government functionaries. Its unflinching and unflattering reports on matters of utmost public importance evidence the same. On one hand, while the nation was rejoicing the Commonwealth Games, the CAG’s report on sheer mismanagement of public resources on the cost of the public money came as a nerve-wracking disclosure. The CAG could have concealed or taken the CWG lightly in such a revelling atmosphere. But the CAG’s commitment to his office and more so to the Constitution was seen weighing more than that rejoice.

With the enforcement of the Constitution of India, We, the People, had resolved to constitute India into a socialist country with a mixed economy. Our commitment to a socialistic pattern of society added vastly to the importance of public enterprises. With passage of time and reacting to the global demands, the new economic policy of liberalisation, privatisation and globalisation came to fore in India. As a result, the country’s markets were opened for FDIs and FIIs, which often turned out to be opportunities for authorities to indulge in depraved dealings. In such a scenario again, the CAG came as a defence to the socialistic commitment of our constitution and has tried to strike a balance between the new economic setup and socialism by bringing the public sector enterprises at par with their private counterparts not by just auditing and accounting their expenditures but through assisting them on improvement in financial reporting, accounting policies, internal control system, analysis of non moving inventories etc and ensured credibility of financial statements. For example, Audit Committee of Indian Oil Corporation Ltd considerably contributed in the areas of significant Audit Findings of Internal Audit, review of idle assets, monitoring the award of work on nomination/single tender basis, implementation of SAP system. On the suggestion of the Audit Committee, Steel Authority of India Limited has planned a special study on “Safety Management” and “Major Raw Material Stock Accounting” etc.

The CAG also has played an epochal role in exposing public malice in circumstances where the public authorities fear to take action on his reports. Though dependent on the legislature to take action on his reports, the CAG has exposed such astonishing facts and figures that the authorities were bound to take action on that.

This proactive attitude of the CAG has helped a great deal in meeting some other challenges to good governance namely, a less active civil society. After series of revelations of malpractices by the CAG, the civil society (a term difficult to define) also gained strength to question those in power to explain this mishandling. The civil society movement against corruption in the country emboldened somewhere only after it had some factual endurance from proven malfeasance in form of CAG reports.

The secretaries to various departments are the principal accounting authority and internal auditor of the department, i.e., the primary custodian of the wealth of the nation but the CAG is only a second level accountability check. This function of the CAG should also be taken positively as it can “Report” the mishandling of the national resources rather than just being a plain second level auditor. This strengthens the position of the CAG in meeting the challenges and requirements of good governance.

The standing of CAG and his influence on the administrative structure and functions of the state in India will be dependent not only on his own initiatives, but also how the legislatures and executive react on these initiatives. This constitutional body has withstood the test of time and has emerged jubilant. Out of the constitutional bodies which keep a check on the executive, the CAG emerges out to be a wonderfully structured organization in terms of its selection process and training, the expertise it imparts to its employees and the Audit and Account department. Good governance is not just making the executive comply with existing laws and regulations which makes it static. Good governance if seen as a dynamic concept, it would need continuous improvisations taking clues from global best practices and consensually decided matters.

Good governance in India also has certain nuances developed with the passage of time which still remain out of the purview of the CAG’s vigilance. A decentralized form of governance in India was adopted after the 73^rd and 74^th amendment to the Constitution. This led the government to develop such policies where the nodal agencies are the functionaries at such decentralized levels. But the flow of money to these local government levels still remains out of the purview of the CAG. Though the CAG in its supreme vigilance tries to audit the flow of money from the public exchequer for different flagship programs of the government of the day, but is not able to assess the real amount of money spent on the implementation of these policies. Another recent development in the economy of the country which remains out of the argus-eyed vision of the CAG is the Public Private Partnership arrangements between private players and the State and Central Government. The Honourable Prime Minister of India, in his inaugural address at the celebration of completion of 150 years of the institution of Comptroller and Auditor General of India, emphasised on role of CAG in improving ‘the structure of Public Private Partnership arrangements to ensure that they are transparent, ensure adequate competitiveness and adequately safeguard the public interest’. He reiterated the confidence on the institution in playing a leading role in ensuring that these new initiatives deliver as intended.

Conclusion

Criticism of the CAG is rooted in uneducated opinion and deliberate suppression or obfuscation of facts, to that, can be added the deep-rooted bureaucratic and political antipathy to accountability. The greatest requirement of good governance is prop accountability and responsiveness from all functionaries of the government. All constitutional and extra-constitutional bodies charged with the responsibility of maintain public money and curbing corruption at high offices should work interdependently, thus not leaving the CAG abandoned, just auditing and accounting the finances of the government, with no teeth and limbs to get the findings implemented. As an important watchdog in our democracy, it falls upon this institution to sift the wheat from the chaff, to distinguish between wrong-doing and genuine errors, to appreciate the context and circumstances of decision making processes.

It also falls upon the Parliament and the government to ensure that the independence of this institution is maintained and respected as well as strengthened in the future and in an environment of rampant misuse of public money, CAG reports and findings not be demoralized.

© Copyright 2011

Quarreling with Indian Perspectives

There have been few people in the world who have gone against the stream and these were the few people who could challenge the existing state of affairs in the society at a given point of time. If we consider the situation of India in this regard, except the Rigvedic and the post Vedic times to the golden era of the Guptas, India’s ideological, socio-economic, political and cultural; considerations have often been camouflaged by the advent of different colonists in India. India totally lost its firm ideological perceptions after the advent of the Islamic rulers and this loss amplified with the arrival of the British in India. Hence the haziness and indifferent perceptions which became the part and parcel of common Indian thinking can well be attributed to the dark ages from the eleventh to the eighteenth or rather nineteenth century in India.

During the same period approximately, in the western nations, was seen the wave of Renaissance which culminated as the great industrial revolution in the late eighteenth century having its roots right at the MAGNA CARTA of 1215 in England. But a post Industrial revolution epoch saw a colonial expansion by these western nations which ultimately became a major cause for an economic retrogression in the colonies and in our case, in India. But this came up as an instrumental perception which was created in the minds of the Indians which ignited the sentiment for freedom struggle in India, and consequently independence was achieved.

A larger question still hits everyone’s mind today, whether discussed generally or academically, that what the “Mantra” was, through which these western nations succeeded in conquering or rather capturing such a large part of the world to the extent making it a proverb that ‘Sun never sets on the British Empire’.

Another question which arises is that whether we are, after 63 years of independence, capable of retaining our identity, especially, our socio-economic, political and cultural perceptions and idiosyncrasies or again a neo-colonialism not physically but mentally is making us slaves, since these were the countries which, though being smaller in population and scarce in resources could make their identity as the first world countries and developed countries way back, when we would have never thought of even an independent nation. In the words of Professor G. Mohan Gopal, “When we Indians were building Taj Mahal, the west were building the notions of freedom and equality.”

What has lacked in us and still lacks in our attitudes and perceptions which make us secondary to these nations who have ultimately dwelled over our resources?

They are better than you!

राती जागे शेख सदा मैं, ते राती जागे कुत्ते, तैं थी उत्ते

दर मालिक दा मूल न छड़दे, पावें सौ-सौ पौंदे जुत्ते, तैं थी उत्ते

रुखी सुखी रोटी खान्दैं, अत्ते जागरे तै सुत्ते, तैं थी उत्ते

चल वे मियां बुल्लेया, चल यार मना ले

नहीं ते बाज़ी ले गए कुत्ते, , तैं थी उत्ते

You keep awake at night and consider yourself pious

But (Bulleya) even dogs stay awake the whole night,they are better than you!

They do not leave the door of the master, even if beaten, they are better than you!

They eat the leftovers and stale food, they are better than you!

Come on Bulleya, let's go and pacify the Almighty

Otherwise the dogs steal the game, they are better than you!

Courtesy: Kalams of the Great Sufi Saint Bulley Shah

The Hindu Grief

This fact cannot be ignored that a country which was the centre of the Vedic religion in the world still has a majority population of followers of Hinduism, an aftermath of the Vedic religion, though our country is a secular one.

After Independence, Hinduism or Hindutva has often been used for political gains, not by those parties who have Hindutva on their agenda but by those who oppose it.

Another fact cannot also be ignored that the terrorist activities which started in the backdrop of Jihadi movement and Pakistan's illegitimate demand for Kashmir had almost every terrorist belonging to the "so called minority community in India". The beginning of this 3rd millenium saw internal terrorist attacks on Hindu holy places like that of Varanasi etc.

The so called secular parties, who under the garb of this shit of "secularism", only try to appease those who are not from the majority community have now started blaming the Hindu groups of professing "Saffron Terrorism". Recent confessions by certain Hindu chieftans of their involvement in Ajmer and Malegaon blast raises serious questions in the minds of the people from the majority community in this country. This has given the so called Secular parties weapon against the Hindu Nationalist organisations like RSS and parties like the BJP.

But a flipside is also to be seen where these so called Secular parties like that of the ruling Congress and its allies at the UPA instead of fighting their own internal failures of rampant corruption and monstrous NAXALISM and CROSS BORDER TERRORISM have instead got this new JINNIE of BHAGVA AATANKVAAD.

I ask these so called "secular monsters" that:

1. In a country where out of 130 crores of people, atleast 85 crores are HINDUS, can't even mere 85 people be extremists, and has the involvement of such meagre numbers created terrorism?
2. Why are these secular monsters not paying heed to the fact that in almost all activities of terrorists at places of National importance, the involvement of only the Jihadi terrorists have been there?
3. Are the National Guests AJMAL KASAB and AFZAL GURU Hindus?
4. In an atmosphere of fear and pressure of these secular monsters which they have created in the minds of the majority community by regular appeasement of the so called minority community just for vote bank, isn't it expected that atleast some handful people would be so enraged that it would force them to take to such activities of violence and terror in the country? Till what time would they remain silent?

The probable answers which can be gathered from the current prevailing scenario are that these parties and their ministers and leaders, only to hide their misdeeds of corruption and their impotency in fighting any of the problems facing the country, have started highlighting this new concept of SAFFRON TERRORISM.

Its an accepted fact that there are around 42 Islamic Nations in the world which are governed by the Sharia Law and many more countries having Christianity as state religion, which have their respective Blasphemy laws in action, where majority of population is sensitive about the religion. This reminds me of a recent incident in Pakistan where a Governor of a Punjab State was shot dead by a his own staunch orthodox Sunni Muslim gunman who was so hurt by his statements against the Islamic Blasphemy Laws of Pakistan that he could not control himself and fearlessly shot him dead. As if this was not sufficient, all the supporters of the Islamic Sharia Blasphemy Law greeted him when he was being presented before the Magistrate as if he had done a gallantry task of high reward.

The point I want to convey is that the condition in India is totally different and I appreciate and hold in high esteem the Indian Constitutional spirit.

But its good for these secular monsters that India does not have a Hindu Blasphemy Law of its own, despite being a Hindu Majority Nation (Hinduism can never have a Law like Blasphemy for it has been the most tolerant religion till date in the world, and that's commendable!!!). Had there been any such law in India as well, all these so called secular monsters would have suffered the same fate as those in Pakistan and other countries. They should thank the Almighty that those people, who they name - SAFFRON TERRORISTS, are tolerant Nationalists and though a handful of them indulge in activities, I also condemn.

In legal parlance it said that there is a rule and it has exceptions. These handful people from Hindu extremist groups should be considered an exception to the rule which still is that almost all anti-national terrorists are Jihadis. And these so called secular parties should restrain from impugning organisations like RSS and parties like BJP for acts which are not a rule but an exception to the rule.

Governments in Bihar and Gujarat have shown that the Hindutva agenda is taking a back-foot for BJP and allies but now it seems that the parties accusing BJP of its Hindutva agenda, are not able to digest this trend..

The question now remains:

WHO WANTS HINDUTVA and "SAFFRONISM" alive for political gains: the BJP or Congress & UPA????