Opinion ‘Transparency,accountability here to stay; you can no longer take decisions with brazenness’

With the CAG reports on 2G spectrum and coal,and the actions of the CBI,including the latest FIR in the Hindalco case,the industry and the bureaucracy are running scared. Did you anticipate such a reaction?

There is no smoke without fire,otherwise why do you think we (the CAG and CBI) would jump into such issues? These subjects fall in the category of irregularities and inappropriateness. And the CAG doesn’t look at the economy with an audit microscope,it looks at actions and implementation. The CBI looks at criminality.

What about the impact on investor sentiment?

The investor is not ignorant of what is happening on the ground. It is not as if he not aware of what is happening or how opaque things are. Crony capitalism is not something created by the CAG. People are able to see what is happening and they don’t have to wait for the CAG or the CBI to know that such issues exist. These things are already in the public domain and a lot was known,for instance,about the spectrum case before the CAG got into it. There are many,let us say,whispers in the corridors too.

But UPA ministers continue to blame you as CAG for the state of the economy. First it was Kapil Sibal and now Manish Tewari. What is your reaction to such criticism even after you have demitted office?

I chose not to react then and I will not react now. All this makes no difference to me.

But the estimated losses — assessed by the CAG as high as Rs 1.7 lakh crore in the 2G spectrum case and around Rs 1.8 lakh crore in the coal allotment scam — are unprecedented.

The size of the economy has increased,so the size of government contracts has also gone up. Besides,the citizen has become empowered enough to ask questions that might be inconvenient. People in government,everyone,even the corporations,have to answer these questions. The RTI has made a big difference. Transparency and accountability have come to stay,and you can no longer take decisions in an opaque manner,with appalling brazenness. Now it is citizens at the centre,and the government knows that all decisions can come under intense public scrutiny.

There is a contradiction here. You justified the poor inflows from the sale of 2G spectrum when the government finally conducted auctions by saying that this was because the economy was in a slump. Isn’t that so?

Market determinants are not static. If you buy an apartment now,the price will not be the same as it was three years ago. Similarly,for the price of spectrum,there was a huge differential between 2008-09 and 2012,when the spectrum sales were done first on first-cum-first-serve and then via auctions. Markets are subject to change and valuation. I am also repeating what I have said several times earlier — the CAG has never questioned or criticised government policy.

Coming to the coal allotment scam,why did the CAG change its formula of calculating losses from notional to windfall gains?

Windfall gain is a term Coal Secretary P.C. Parakh himself used when he talked about loss to the government.

The CAG report uses Parakh’s argument as the cornerstone of its assessment of windfall gains. How do you feel now that he himself has been named by the CBI as an accused in the Hindalco allotment case?

I do not want to comment on the actions of the CBI,but I think that the prime minister’s office has now issued a detailed clarification. Parakh is not in any trouble. It has been clarified that all the decision-takers together arrived at the formula when the company got a 15 per cent stake. All the issues have been addressed by the PMO. And the CAG also had all the information and correspondence on the Hindalco case,but it did not figure in our final report for this very reason. We did not put it in because we found all the justifications.

After an eventful five-year term as CAG,are you satisfied with the extent of wider auditing coverage achieved? When you took over you said only 60 per cent of the government was under audit.

We were able to bring in all PPPs,panchayati raj institutions and NGOs getting government funding under audit. Roughly,I think,90 per cent of the government is now covered by the CAG,but much of this has been done through executive orders,not an amendment in our act.

Is there any other systemic change you wanted to bring about,but failed? The low levels of scrutiny of CAG reports by Parliament’s public accounts committee (PAC),for instance?

The CAG does roughly 160 reports every year,but only about 20 of them are discussed at length by the PAC. It is the CAG who advises which should be scrutinised. Some sub-committees were set up for wider scrutiny,but I don’t know how effectively they are working now. Yes,it is a failure of the system and in some countries,parliamentary reviews of audit reports go on through the year. We should also do more.