CAG constitutionally obliged to expose government inconsistencies
By Nantoo Banerjee
Notwithstanding the practicality and correctness of the accounting methodology applied by the auditors in the office of the Comptroller and Auditor General of India (CAG) in ascertaining a combined loss of Rs. 2.20 lakh crore to the exchequer in a generous giveaway by the government to several large companies with regard to coal block allocation, special privilege to Reliance Power and land lease to GMR in an airport project, it would be wrong to assume that the country’s super auditor had acted beyond the constitutional mandate to come to such a conclusion. In discharging his audit function, the CAG has both constitutional mandate and professional obligation to make any observation that concerns the government’s income and expenditure. It is for the government to accept them or reject CAG’s comments on technical and legally valid grounds, but not on the question of his constitutional jurisdiction.
The instantly aggressive reaction of the union minister of state in the Prime Minister’s Office (PMO), V K Narayanswamy to the latest bunch of CAG reports that “CAG is not following its constitutional mandate” and that “its job is only to look (into) the audit performance” is, to put it mildly, unfortunate and also unbecoming of a parliament member and a minister in the union government, who seems to have little respect for either the Constitution of India or the people of the country that the parliamentarians firstly represent. The good news for the whole country is that the CAG is finally exercising its constitutional mandate to expose corruption in government-private deals, robbing the exchequer lakhs of crores of rupees which, had it gone to the nation’s treasury, could have been better utilized for public good.
Constitutionally, the CAG is duty bound to communicate its major findings and observations in its audit reports every year. These reports and certified finance and appropriation accounts are submitted to the President of India or state governors for being laid before Parliament or state legislatures. Audit reports on public sector undertakings and autonomous bodies are sent to the concerned ministries or departments for being laid out before the Parliament or the state legislatures. By recording its “major findings and observations” with regard to those questionable government deals in its latest reports, the CAG has only tried to meet its constitutional obligation. On the contrary, the CAG could have been accused of being under the influence of the government for ignoring its constitutional mandate, had it failed to note those “major finding and observations.”
Narayanswamy is wrong. Before shooting his mouth, the minister could have studied the aspects of the CAG’s powers and functions and its rights and obligations and also the practices followed in other democracies such as the USA and UK, on which the Indian act is modeled. Like all statutory auditors, the CAG’s primary responsibility and obligations is to the nation, the ultimate stakeholder, and not just the government. Parliament, which is above every other institution in a democracy, represents the people or the nation. The minister may not be aware that the institution was set up by the erstwhile British rulers in 1860 to bring about transparency, accountability and probity in public life. The British government realized the importance of such an institution after it assumed power from the East India Company in 1858. The government of India acts of 1919 and 1935 enhanced its position as Auditor General of India and in 1950, the Indian Constitution further improved its status by re-designating it as the Comptroller and Auditor General of India.
The CAG and the Indian Audit and Accounts Department (IAAD) functioning together constitute the Supreme Audit Institution of India (SAI). Senior functionaries of the SAI representing the CAG in the states are called Accountants General. The Constitution of India has mandated the institution as the auditor to the nation. Articles 148 to 151 of the Constitution prescribe a unique role for the Comptroller and Auditor General of India in assisting the Parliament to enforce the said accountability of the Government departments. The CAG audits all receipts and expenditure of both Central and State Governments, including those of bodies and authorities substantially financed by the government. The CAG is also the external auditor of government-owned companies. The reports of the CAG are taken into consideration by the Public Accounts Committees (PAC) of Parliament and the State Legislatures.
The CAG of India is appointed for only five years. He may be within his right to interpret certain laws, but he certainly does not enjoy the US comptroller general’s power to disallow any government expenditure. He can merely question such acts. Also, the CAG does not evaluate the overall efficiency of government programmes. It is only concerned with specific cases of the government’s income and expenditure statements and practices. Parliament is free to consult the CAG on legislative oversight matters, although it has not happened as yet in India.
Former US Comptroller General David Walker (1998-2008) once said in a media interview: “I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan but our own fiscal irresponsibility … I’m going to show you some numbers…they’re all big and they’re all bad.” So bad, that Walker had finally given up on elected officials and taken his message directly to taxpayers and opinion makers, hoping to shape the debate in the next presidential election. “You know the American people, I tell you, they are absolutely starved for two things: the truth, and leadership,” Walker said. He called it a fiscal wake up tour, and he was telling civic groups, university forums and newspaper editorial boards that the U.S. had spent, promised, and borrowed itself into such a deep hole it would be unable to climb out if it didn’t act now.
With the Indian democracy yet to evolve into a more honest and tolerant institution, the fight between the CAG and corrupt and inefficient government officials will continue. The CAG must not give up under any pressure, criticism and frustration. It is the only hope for an efficient and corruption-free government in future. (IPA Service)