CAG , MR. VINOD RAI AND SCAMS

BY :- ROHIT SINGH NARUKA

WHAT IS CAG?????

ABOUT CAG• The Comptroller and Auditor General (CAG) of India is an authority, established by

the Constitution of India under Chapter V, who audits all receipts and expenditure of the Government of India and the state governments, including those of bodies and authorities substantially financed by the government.

• The reports of the CAG are taken into consideration by the Public Accounts Committees, which are special committees in the Parliament of India and the state legislatures.

• The CAG is also the head of the Indian Audit and Accounts Service, which has over 58,000 employees across the country.

• The current CAG of India is Shashi Kant Sharma, who was appointed on 23 May 2013. He is the 12th CAG of India.

• The Comptroller and Auditor-General of India is appointed by the President of India following a recommendation by the Prime Minister.

WHO IS VINOD RAI????

ABOUT VINOD RAI• Vinod Rai (born 23 May 1948) was Comptroller and Auditor General of India. He

assumed office on 7 January 2008 till 22 May 2013.• He is the current chairman of UN Panel of External Auditors.• He holds a Masters Degree in Economics from the University of Delhi, and Masters

in Public Administration from Harvard University.• He is widely considered as symbol of the anti-corruption movement and is

credited with having turned the office of CAG into a powerful force for accountability and transparency in contemporary India.

• Forbes described Rai as being among that rare breed of civil servants who know how to get work done in the government.

• He has consistently hit the headlines for his unforgiving audits, ranging from the scathing report on the shoddy preparation for the Commonwealth Games to the latest on spectrum allocations for second generation (2G) telecom services.

• Recently the CAG under Vinod Rai has constantly been in the limelight for its reports exposing mega corruption, particularly in 2G Spectrum Scam, Commonwealth Games scam and other scams

SOME FAMOUS CASES

2G SPECTRUM

COALGATE

(SCAM)CWG

(SCAM)

2G SPECTRUM• He is widely credited for the report on issue of Licenses and Allocation of 2G

Spectrum by United Progressive Alliance, UPA government which resulted in a huge controversy in India.

• The report estimated that there was a presumptive loss of 1766.45 billion (US$28 billion).In a charge sheet filed on 2 April 2011 by the investigating agency Central Bureau of Investigation (CBI), the agency pegged the loss at 309845.5 million (US$5.0 billion).

• On 2 February 2012 the Supreme Court of India on a public interest litigation (PIL) declared allotment of spectrum as "unconstitutional and arbitrary" and quashed all the 122 licenses issued in 2008 during tenure of A. Raja (then minister for communications & IT in UPA government) the main accused.

• The court further said that A. Raja "wanted to favor some companies at the cost of the public exchequer" and "virtually gifted away important national asset".

COAL SCAM• Coal allocation scam or Coalgate - scandal concerning allocation

coal deposits.• It is about irregularities in allocation to PSEs and private companies.• In March 2012, (CAG) accused Government of India of allocating

coal blocks in an inefficient manner during period 2004–2009.• Over the Summer of 2012, the opposition BJP lodged a complaint

resulting in a CBI probe into whether the allocation of the coal blocks was in fact influenced by corruption.

• CAG's argument is that the Government had the authority to allocate coal blocks by a process of competitive bidding.

• Both public sector enterprises (PSEs) and private firms paid less than they might have otherwise.

CONT.• The CAG Final Report tabled in Parliament put the figure at INR1,85,591

crore (US$30 billion).• On 27 August 2012, Indian prime minister Manmohan Singh read a

statement in Parliament rebutting the CAG's report both in its reading of the law and the alleged cost of the government's policies.

• CAG report suggested if coal blocks have been allocated more efficiently, resulting in more revenue to the government.

• At no point did it suggest that corruption was involved in the allocation of coal.

• In response to a complaint by the BJP, the Central Vigilance Commission (CVC) directed the CBI to investigate the matter.

CWG SCAM• The Commonwealth games scam as it is known involved large scale

misappropriation of money during the preparatory phase and conduct of the 2010 Commonwealth games held in New Delhi.

• The total value of the scam is estimated to be 76,000 crore.• The various contracts were manipulated by Kalmadi and team and allegedly

misappropriated huge amounts in the process.• Politicians involved 1) Suresh kalmadi, the Congress party representative to 15 LokSabha from the Pune

constituency. He was the Chairman of the Organizing Committee of the Delhi Commonwealth games.

2)Sheila Dikshit, Chief minister of Delhi: Was indicted for several irregularities in the CWG processes both by Shunglu committee and also by the CAG

3)Robert Vadra• Corporations involved HCL Info systems.

EMMARMGF DDA. MTNL ETC.

Reforms suggested by Vinod Rai

• In November 2009, the CAG requested the government to amend the 1971 Audit Act to bring all private-public partnerships (PPPs), Panchayti Raj Institutions and societies getting government funds within the ambit of the CAG.

• The amendment further proposes to enhance CAG’s powers to access information under the Audit Act. In the past, almost 30% of the documents demanded by CAG officials have been denied to them.

• The PPP model has become a favourite mode of executing big infrastructure projects worth millions of rupees and these projects may or may not come under the audit purview of the CAG, depending on sources of funds and the nature of revenue sharing agreements between the government and the private entities.

• Currently, it is estimated that 65 percent of government spending does not come under the scrutiny of the CAG.

OUR VIEWS

• All the Government Spending to come under the ambit of CAG.

• Financial viewings and sharing's of any kind of Businesses must be made available to CAG.

• CAG must be the sole party in decisions.

• CAG reports must be used to push reforms.