How would institutional historians look at the decade 2014-2023 when they reflect on the way constitutional institutions performed?
Following general elections in April-May 2014, the National Democratic Alliance (NDA) coalition came to power under the leadership of Prime Minister Narendra Modi. One of the major points of the NDA’s election propaganda was its promise of a corruption and crony capitalism-free government.
Towards this goal, it used audit reports by the Comptroller and Auditor General of India (CAG) that were critical of policy decisions by the previous ruling coalition, the United Progressive Alliance.
However, a rude shock came soon thereafter when in October 2014, the then-finance minister Arun Jaitley lectured the principal accountants-general at their bi-annual conference.
Jaitley’s speech was not too different from that of the chairman of the public accounts committee, Professor K.V. Thomas. If Thomas advised the CAG not to indulge in reporting ‘notional losses’, Jaitley advised the CAG not to hype its audit findings for media attention.
These remarks showed how much politicians really care about this constitutional institution. Ironically, the theme of the conference was ‘Promoting Good Governance and Accountability Through Audit’!
The late Ramaswamy R. Iyer had pointed to a “constitutional impropriety” in the chairman’s remarks and argued that the constitution grants the CAG and the Indian Accounts and Audit Department (IAAD) complete autonomy in deciding the scope of an audit exercise.
Two months before that volte-face by Jaitley, in August 2014, the Times of India reported that CAG Shashi Kant Sharma had written to the Union finance minister “demanding that the national auditor should be given RTI powers to access information and a penal provision should be included in the existing [CAG Act] to make it mandatory for furnishing of information [by the executive] in a time-bound manner” (as paraphrased by TOI).
This letter dated June 2014 underlined that the proposed amendments had been under the finance ministry’s consideration for the preceding five years (i.e. 2009-2014).
A proposed draft amendment Bill to give the IAAD adequate powers was first submitted in November 2009. The CAG’s office had made subsequent revisions to the Bill based on suggestions by the finance ministry, and submitted a revised Bill in February 2011.
If one looks at the debates of the constituent assembly of India while it framed the constitution, one will understand that the CAG and the IAAD were imagined as being independent of and autonomous from executive interference. So, such a dialogic and consultative approach should have evoked a positive response.
Sadly, there had been complete silence from the ministry on this important matter. Jaitley and his party failed to give more powers to this constitutional institution during their first year in office, and the proposed amendments have not been in introduced in parliament till date.
Strong audit findings, zero consequences: environment clearances and post-clearance monitoring
On March 10, 2017, a performance audit on ‘Environmental Clearances and Post-Clearance Monitoring Mechanism’ was tabled in parliament. While the audit findings and recommendations clearly pointed to the need to strengthen compliance with environmental regulations, the Modi government’s actions have brazenly undermined this sane advice from the national auditor.
Throwing these findings away, the NDA government continued its race to the bottom in diluting environmental laws and facilitating the corporate takeover of natural resources.
Recently, a performance audit on the ‘Conservation of Coastal Ecosystems’ tabled in parliament on August 8, 2022 also pointed out brazen non-compliance with the EIA notification by Adani’s port expansion at Dahej.
Redacted audit reports on defence deals
The CAG’s audit report on Rafale has come under criticism for agreeing to editorial cuts from the audited entity on the matter of pricing. Usually, audit reports on defence matters only undergo such redaction as part of the protection the nation’s strategic interests. Analysts believe that the redactions in the Rafale report went much beyond such usual suggestions.
Audit reports that were planned but never saw the light of the day
In an interview with Josy Joseph, Shashi Kant Sharma had talked about undertaking an audit of the fiscal impact of demonetisation. However, his successor Rajiv Mehrishi, who took over on September 25, 2017, did not pursue this thematic audit.
Delayed audit reports and reduced output marked Rajiv Mehrishi’s years as CAG
Much before the COVID-19 pandemic impacted work at the national audit office, there were signs that the machinery was slowing down. During the year 2017-18, the CAG prepared only 98 audit reports in total, and in 2018-19, it prepared only 73 audit reports in total. In 2020, Mehrishi signed a bulk of audit reports in his last week in office.
The slowing down of the auditing processes since 2017 was also accompanied by prolonged delays in the tabling of audit reports in parliament by the ruling regime.
Non-transparent process of selecting the CAG
For many years, concerned citizens have been left wondering if the by process by which the CAG is selected is completely arbitrary and goes against the grain of what was envisaged during the debates of the constituent assembly of India while framing the constitution.
Selecting a senior administrative services officer who has worked in proximity to those in the ruling dispensation does raise certain doubts in the minds of the public. Sometimes this arbitrary process, wherein the prime minister suggests to the president one name out of a shortlist prepared by the cabinet, creates an obvious conflict of interest.
Tweaking of follow-up performance audit plans
Usually, the senior management of the CAG’s office undertakes follow-up performance audits every five years.
For example, if the functioning of the Building and Other Construction Workers’ Welfare Boards (BOCWWBs) across states and Union territories came under a comprehensive performance audit during the activity year 2008-09 (reviewing their performance between 2003 and 2008), the next follow-up performance audit across states would take place during the activity year 2013-14 (reviewing performance between 2008 and 2013).
Such follow-up performance audits have not been taken up across all states. This is strange and points to the lethargic attitude of the leadership. The pandemic year (2020-21) made it all the more crucial to know whether the BOCWWBs met their stated goals of providing social protection to our migrant construction workers.
Centrally sponsored schemes not audited
In a recent article titled ‘CAG could have done better’, Govind Bhattacharjee has pointed out that “except [the] PMAY, reports of which are available till 2022, and PM Kisan, [the performance audit of which is] understood to be underway, none of the other centrally sponsored schemes have been audited beyond the fiscal year 2018.”
Let’s hope that the next CAG would be able to sing to the prime minister and the executive that memorable stanza from Tagore’s poem: “chitto jethaay bhayshunyo, uccho jethaay shir, lekhaa pariksha [audit] jethaay mukto”!
Outstanding action taken notes
An audit paragraph, once finalised and figuring in an audit report that gets tabled in parliament or a legislative assembly, requires the audited entity to initiate corrective measures.
Audited entities are required to submit ‘action taken notes’ to the CAG. Non-submission of such action taken notes, with delays running into years, doesn’t augur well for audit findings leading to improved governance.
Thus, the conspicuous decision to not even report the number of outstanding action taken notes or audit paragraphs is a cause for concern.
Year-wise audit reports approved by the CAG
Himanshu Upadhyaya is at the School of Development Studies, Azim Premji University. Views are personal.