CAG should necessarily have powers to bite!!!

In the current Union Budget, while the UPA government was increasing the allocation for its flagship NREGA program – from Rs 16,000 crore to Rs 30,000 crore, resulting in a hike of an incredible 87% – it was again surreptitiously trying to ignore the CAG report. The CAG, or the Comptroller and Auditor General of India, has been consistently criticizing the government for alleged misappropriation of funds, faulty record maintenance systems and rampant corruption that have become synonymous with NREGA and similar other government initiatives. For example, for the financial year ended March 2007, out of an outlay of Rs 12,074 crores, all that was spent was Rs 8,823 crores for NREGA. Not just this, the CAG report also indicted the government for making available only 37.05 man-days of work against the promised 100 man-days. For the year 2007-08, the more shocking revelation that was made by CAG was that while the government had allocated more that Rs 51,000 crore to NGOs for implementing welfare schemes, the government literally doesn’t have any record about where or whether that money has at all been spent. Not just this, CAG further states that India has been rather comfortably sitting on foreign assistance worth Rs 78,000 crores, which has not been utilized even when India continues to pay mammoth commitment charges to World Bank and ADB!! These are a few instances where CAG has exposed the cover-ups of the government and gives an idea about why, in spite of all the money spent in India on various rural development and poverty alleviation programs, India’s rural urban divide continues to just widen.

Not just with respect to social initiatives, but CAG also has been consistently raising flags against various other expenditure and non-expenditure issues, which are imperative for the economy. Consider this! Even when the terror threat is looming large in India, and especially in prime metropolitan cities like Delhi, the CAG report reveals that a substantial portion out of an earmarked Rs 6,000 crores for the modernization of Delhi Police was returned. In addition to this, Rs 4,287 crores was returned last year by the Ministry of Defense for its inability to judiciously spend the money on acquisition of fighter aircrafts, warships, helicopters and artillery – thanks to India’s archaic and snail-paced bureaucratic process. All this at a time when the armed forces have been crying hoarse to the government to acquire more defense hardware. And the list goes on…

In fact, CAG is one of the very few organizations in India which works rather independently and is unabashed in its criticism of the government when it comes to misappropriation or wastage of money. Over the years, as coalition politics and regional based politics became even more compulsive, incumbent governments as well as the opposition have been giving too much stress on increasing allocations in budget to appease concerned vote banks. And once such populist allocations are made and announced in the budget, no one cares a damn where that money is heading and how it is being spent. Perhaps this is where CAG becomes so significant. Over the years, successive governments in India have been extremely uncomfortable with the exposures made by CAG, and have thus tried best to counter that with even bigger promotional campaigns to highlight their achievements rather than rectify their own mistakes. In the present report, CAG also brought in recommendations for rectifying around 14 grave mistakes in the government machinery. But then, the government cares a hoot for such issues, especially when elections are round the corner. Most shockingly, there is no separate dedicated time in the Parliament to debate over the findings of CAG. It is audacious that the Indian Parliament has time to debate issues of all lesser relevant issues than its own financial health.

Ironically, financial resources in essence have never been a problem in this country. At least, it has seemed so, given the level of allocations that have been made by successive Indian governments. Yet, all that is required is a CAG with statutory enforcement powers to not just indict the government but force it to change its way of functioning. The Election Commission has shown what wonders can be done if statutory powers are given to the body which conducts elections so as to make sure that the Commission doesn’t become subservient to the incumbent government in times of an election. And therefore, just as it is important to have the most fair elections for the largest democracy of the world, it is equally important for that democracy to have a statutory watchdog which would prevent the misconducts of the government or even the custodians of the national wealth. It’s time to implement the same basic principles of corporate governance, even in the case of government functioning.

Every year, when the CAG brings out its annual report, there is a bit of furore for some days in the media and then everything settles down. One rarely sees any Minister or government official being held for financial wrongs and then being penalized or debarred from contesting the next elections. If something like that is done, it would just be a matter of time that the very focus of budget would change from outlay to outcome; as it is a known fact that Indian politicians are very adaptive, especially when it comes to contesting future elections.

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