Last fortnight a respected magazine came out with a report it termed “shocking but true”.
The report claimed that nearly 50 per cent of total Plan expenditure goes unaudited in this country. We, the citizens, presume that every rupee spent by the governments, both at the Centre and the states, is audited. The constitutionally-authorised body to undertake this not-so-glamorous but vital exercise is the Comptroller and Auditor General of India (CAG). Being the watchdog of public finances, the CAG reports form the very basis for scrutiny by the Public Accounts Committee (PAC) of Parliament. The immediate implication of the aforementioned report is that we do not know how over Rs 83,000 crores were spent in 2008-’09 — the Centre transferred over Rs 83,000 crores directly to state- and district-level autonomous bodies and non-governmental organisations (NGOs) for implementation of various flagship schemes but it is not known how much of this money remained unspent. By presumption, therefore, I risk here to say, a similar sum of public money is just not being audited, every year, each year!
But why would this happen? Does the Constitution not give enough powers to the CAG? The simple but worrying answer is: As with many things in India, the act governing the CAG — The Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971 — is outdated and needs immediate and urgent updating.
Public spending has been growing in “free India”, especially and justifiably so on welfare schemes. In a liberalised and privatised world where there’s a desperate need to ensure “inclusive growth”, governments have adapted several out of the box ways to reach out to the poor and the needy. In other words, several parallel channels of reaching out to the poorest of the poor have been adopted.
Similar is the need to rapidly develop our infrastructure in order to meet with our growing demands. NGOs were brought in to help with the mid-day meal scheme; public-private partnership (PPP) ensured the desired private capital and innovative management for building the infrastructure.
However, this meant a change in the way public funds were transferred. Central funds were being transferred directly to state- and district-level autonomous bodies. Some of these Central funds do not have to pass through the state budgets. The funds transferred thus remain unaudited. Tracking down the transfer is possible, we can say, but accounting and auditing the usage of funds for the stated purpose is out of the pale of the CAG.
Addressing a national seminar on “Legislature and Audit Interface for Enforcing and Strengthening Accountability Mechanism”, the chairman of the Public Accounts Committee, Murli Manohar Joshi, said, “…the government’s capacity to keep track of fund flows is… shrinking. This development poses a dilemma, which is to keep intact the structure of accountability in regard to public money without losing the operational flexibilities expected from these new approaches in delivery of services to the citizens of this country. We will therefore have to readjust and refocus our strategies to meet this new situation”.
There are several organisations within the government’s orbit that have been given exemption from the ambit of the CAG, such as the National Highways Authority of India, the Telecom Regulatory Authority of India and the Petroleum Gas Regulatory Board.
The PAC chairman observes, “Though enormous responsibility and discretionary powers have been bestowed on such bodies, there is regrettably no parliamentary oversight over their functioning”.
This anguish is reflected in the comments made by the Comptroller and Auditor General of India, Vinod Rai, when he says, “While any individual can use the RTI and get information within 30 days, the CAG does not enjoy any such privilege”. Privilege is not what the Comptroller and Auditor General of India needs. He should be vested with what is rightfully due to a watchdog; a watchdog of all our monies.
The sheer size of the sums of monies involved makes it necessary for the CAG to get the powers to audit. The PAC estimates that an investment of Rs 20.3 trillion is to be made in the infrastructure sector alone during the 11th Five-Year Plan period. In a PPP setup at least less than half of the money will come from public funds. We know that nearly Rs 59,000 crores are spent on National Rural Employment Guarantee Scheme and the Pradhan Mantri Gram Sadak Yojana, while nearly Rs 13,000 crores are spent on Sarva Siksha Abhiyaan and the Mid-day Meal Scheme.
Throwing money at problems alone cannot help attain the objective. We should “process, assess” them and refocus as necessary.
Talking more than a decade ago on “How to guarantee non-performance”, management guru Peter Ferdinand Drucker observed: “Most public service institutions, governmental ones and non-governmental ones are budget focused. For performance, the budget needs to be paralleled with a statement of expected results and with systematic feedback from results, on expenditures and on efforts. Otherwise the agency will, almost immediately, channel more and more of its efforts toward non-results and will become the prisoner of its limitations, its weaknesses, and its blind spots, rather than the beneficiary of its own strengths”. (Towards the Next Economics and other Essays, The Drucker Library, Harvard Business Press, 2010)
There is an urgent need to give more powers to the CAG. The act of 1971 enabling the CAG needs to be revisited. Parliament should immediately attend to the desperate call of the Comptroller and Auditor General of India to empower him. People of India should be convinced that every paisa of the tax-payers’ money is accounted for. After all it is hard-earned money of the citizens and is being spent on very worthy and deserving causes. Let us be convinced that it is so assessed, too.
- Nirmala Sitharaman is spokesperson of the Bharatiya Janata Party. The views expressed in this column are her own.
Source: www.deccanchronicle.com/dc-comment/where’s-our-money-905 -
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