INTERVIEW OF CAG VINOD RAI

The man in the hot seat, the Comptroller and Auditor General (CAG) of India, Vinod Rai, says he’s never faced political pressure on any audit. On the 2G scam, he says his report clearly says the “amount of loss can be debated”. And it was the petroleum ministry which asked the CAG to audit RIL and other exploration projects. Outlook’s Lola Nayar spoke to the CAG. Excerpts:

How are you handling all the criticism coming your way?

You are the first person who is suggesting that I have been facing criticism when the whole world thinks I am criticising them. Everybody asks me: “Why are you criticising so and so” and “Who are you going to slam next”?

Several political and corporate figures have questioned the CAG’s competence after damaging reports on the Commonwealth Games, 2G scam and now the charge of gold-plating by oil and gas exploration companies.

We conduct three kinds of audits. The first is Financial Audit. The second is Compliance Audit, to see whether expenditures comply with what was budgeted. The third is Performance Audit. In a letter issued in June 2006, the finance ministry clearly states that a performance audit is totally within the scope of the CAG’s audit and that he should have unfettered access to records. Now, whether it is 2G spectrum allocation or profit-sharing in petroleum, these are deemed performance audits because public goods have been made available for a private partner to exploit.

You say Reliance has criticised us for not taking their viewpoints into account. We conducted an audit of the petroleum ministry on the basis of a request made by the government. They wrote to us in November 2006, informing us that a number of concerns had been raised regarding the profit-sharing contract with the three parties, not just Reliance. The private operators objected to our involvement, perhaps rightly so, arguing that the CAG was never mentioned in their contract. But the government said the CAG has unfettered access and so, should be allowed to audit. They went to court; the case was fought for about three years. Only when they received clear directions did they let the CAG do the audit. We did the audit under the aegis of the ministry. Even when we got the replies, it was through the ministry. We have told the ministry that the portions that concern any private operator should be shared with all three operators to get their inputs. We are neither dealing with any operator directly nor are we entertaining them.

Kapil Sibal trashed your 2G scam report, did it dent your credibility?

The minister totally endorsed my report. He said he agrees with the CAG on two counts and disagrees on one. He agreed that rules and regulations had not been followed and set up a one-man commission to investigate. He also agreed that irregularities were committed to favour a party. The CBI is conducting inquiries on this. What does he disagree with? It is on the computation of the loss. My report also says: “...The fact that there has been loss to the national exchequer in the allocation of 2G spectrum cannot be denied. What can be debated is the amount of loss”.

Do your officials ever come under political and bureaucratic pressure?

Absolutely none, it is really remarkable the way we are left alone to do our work.

About your recent reports on 2G spectrum allocation and exploration activities, you have been criticised for leaking your reports.

What would we gain by leaking our reports? We would be stealing our own thunder. If it goes to Parliament, it will be laid before the House. And in the evening, the deputy CAG would hold a press briefing and explain the report. We would like for it to come out as a splash. Why would we want it leaked in bits and pieces?

Does the CAG have the necessary competence to audit the multitude of government departments, particularly with the government now looking at you to audit PPP projects?

At any point of time, an audit requires a certain element of expertise. Be it on defence, atomic energy, health or education—each field requires expertise. That is why we conduct an entry conference. When we do this, we expect you to explain the nuances of whatever your area of expertise is. Our strength today is the human capital we possess. Today, we are recognised among the top three or four auditors in the world.

In the case of exploration audits, the CAG’s expertise and understanding of various issues has been questioned.

I have 14 officers working in West Asia, helping the SAI (Supreme Audit Institution) audit their own exploration activities. The officer who did this (auditing the exploration activities in the three blocks, including KG-D6) has worked in the Gulf for at least four years. Let anybody come face-to-face with our officers and we’ll show them the extent of our understanding.

How satisfactory is the action taken, based on CAG reports?

There was an era wherein the CAG reports were not taken seriously. I remember commenting over here, when the PM was present, that one-third of our reports go unanswered. But I must also accept that, of late, the government has become very proactive. I am very enthused by the fact that the defence ministry in their procurement, and the environment ministry in their assessments, have both come out with revised guidelines.

Law minister Veerappa Moily criticised CAG’s inability to forewarn the government on various lapses. Will the proposed amendments to the Audit Act help you address this?

We have only asked for three major things. One basic criticism against us was that our reports come out very late. But exactly why were they late? If I went for an audit and asked for comments, you could give it to me in a day, in a month, in six months, or never give it and I could not do anything about it except remind you. Today, the government has empowered citizens with the RTI Act. We are asking for similar powers so that my audit queries are answered in 30 days.

Article 151 stipulates that we prepare our reports and give them to the president or the governor, “who shall cause it to be laid in the table of the House”. Today, we give the report to the ministries. They may lay it in one month, six months, one year—the discretion is entirely theirs. We have said that if the House is in session, the report should be laid immediately. If not, it should be laid in the House within seven days of it reconvening. In 1971, there was no 73rd or 74th Amendment, so no panchayati raj institutions existed, there were no PPPs or NGOs or special society (government-funded niche societies) and we did not have a mandate to conduct an audit of these institutions. We have asked them to be included in our mandate now.

How many CAG reports have not been laid in Parliament?

They have all been laid, but with delays—some after more than a year—because their timings were deemed inconvenient to governments from time to time. This happens more in the states than at the Centre. Two reports, one on Maharashtra and one on the Delhi Metro, took more than a year to be laid.

What is the track record of your reports being taken to their logical conclusion?

Six to 10 years ago, it wasn’t very good. First, because there were substantial time delays, the public did not take enough interest in the issue or it had remedied itself. Second, the accountability was just not there. So you just dumped it. But today, if it is more in real time, then accountability gets established.

We heard you are a gardening enthusiast: Is it your wife’s passion or yours?

No, no. I am the mali. Our roles are clearly defined, she’s the one in charge inside the house and I am outside it. I can’t mess about inside the house, she can’t do so outside. As long as I produce some sabzi and give it to her. Organic sabzi.