Clash between CAG, TRAI reaches flash point

New Delhi, Jan 8: The row between the office of the Comptroller and Auditor General (CAG) and the Telecom Regulatory Authority of India (T...

New Delhi, Jan 8: The row between the office of the Comptroller and Auditor General (CAG) and the Telecom Regulatory Authority of India (TRAI) has reached a flash point with the CAG informing the telecom regulator that all its records relating to calculation of tariffs were subject to audit. In a letter dated December 29, 1999, to the TRAI secretariat, the CAG had informed the TRAI that under sub-section 3 of Section 23 of the TRAI Act the former had full powers for audit of the TRAI as it had in the case of Government accounts.

The letter clearly states that “audit would be conducted according to the CAG’s (Duties Powers and Conditions of Service) Act and all records required may be produced to audit”. The letter also says that “no further correspondence need be addressed to us (CAG)” in this regard.

The unseemly row between CAG and the TRAI began when in November last year the latter refused to show files relating to the calculations based on which telephone tariffs were fixed. The TRAI at thatstage had said that as tariff fixation was its statutory function under the TRAI Act of 1997, it was not subject to review by CAG.

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The TRAI chairperson, Justice S S Sodhi, in a letter (on December 1, 1999) to CAG V K Shunglu had said that while there was no denial in production of records pertaining to tariff fixation as most of these were in the nature of responses from consumer groups, service providers and Government organisations to the TRAI consultation paper, there was no “specific file relating to tariff fixation”.

Further, TRAI chairman stated, tariff setting powers of the authority were a result of statutory notification which “can only be questioned in the ways known to law and in the established courts of the land.” CAG in turn said that “tariff fixation was an executive function of the TRAI which had huge financial implications in terms of revenues of the Government. ” CAG also stated that “the legal powers of the authority as provided by the TRAI Act relate only to settlement ofdisputes”.

Not only this, Shunglu himself in a letter to the TRAI chairman (on December 6, 1999) stated that “there are enactments which limit the general powers of audit and in those cases we abide by legislative circumcision.” The letter further states that “in the absence of any such express provision in the TRAI Act, the general powers of audit available under the CAG Act cannot be deemed to be curtailed.”

CAG also stated that it also carried out independent audit of several autonomous bodies which had an impact on Government revenues and submitted these to Parliament. CAG has also quoted sub-section 3 under Section 23 of the TRAI Act which states that “CAG and any other person appointed by him in connection with the audit of the accounts of the authority shall have the same rights and privileges and authority in connection with such audit as CAG generally has in the audit of Government accounts and in particular shall have the right to demand the production of books, accounts, concernedvouchers and other documents and papers and to inspect any offices of the authority.”