The story in TOI and the drama that followed – with the CAG denying the story through a letter to the PMO, the PMO releasing a part of it and then a subsequent publication of the full letter by TOI – shows the bizarre way constitutional authorities have started to think and function these days. At the end of all this, it is not clear whether the CAG is standing by this alleged report or denying it. It appears to be denying it. But if there is even an iota of truth in this report, the CAG needs to pause and think where it is going with all this.
Even in the most generous defence of the CAG, one would still have to agree that if the CAG had its way
would have to become a totally capitalistic country. Where everything is sold at the highest price – the poor who cannot pay high prices be damned. Maybe the CAG has forgotten that India is a “welfare state”. The word “socialism” is built into the preamble to the Constitution. No political party can be set up if it does not agree to be a socialistic party. The allocation of coal fields without auctions is just another example of such a welfare practice. If the CAG wants to take a capitalistic approach, there are thousands of other areas that it will find that “have led to a loss to the exchequer”. By that token, the entire $2 trillion economy is a scam! Or maybe perhaps the CAG needs a lesson in the basic polity of the country. India
I can imagine a day when the CAG brings out a report that says that the GOI loses lacs of crores of rupees every single year because of “over employment”. In making this observation, the CAG would be entirely right. But it would also be “clerical”, as has been its method recently. The CAG could compare every Government department with a similar private sector company – and bring out a startling report of this type. Take two examples that come to mind immediately. Prasar Bharati employs some 18000 engineers in its total staff of some 45000 odd. It generates revenues of some Rs 1200 crores or so per annum. These engineers take care of the technical requirements of AIR and DD. The number of such engineers in any private sector broadcaster – either in TV or radio – despite being bigger in revenues than DD and AIR respectively – would perhaps be less than 25. Even considering the outsourcing that private companies do, the number of engineers employed would be less than 100. Technology is a commodity and its upkeep simply does not require so many people. Yet Prasar Bharati has 18000 engineers on its rolls. Take the example of Air
. Its employee strength is many times of a private airline of similar size. India
The moot question is: Does this make a “scam”? Does this constitute a loss to the exchequer? In one way – the way the CAG has started looking – sure it does. If only 100 engineers were employed in Prasar Bharati, then surely Prasar Bharati would be a profitable company. So would Air
. But is that the way the polity of this country is designed? Can the Prasar Bharati afford to run with just 100 engineers, when another part of the Government’s mandate is to run like a “welfare state”? Isn’t employment generation – with all its consequent ill effects – almost mandated by the Constitution? India
Just look at the CAG’s claims. Apparently, the GOI should have auctioned all the 155 coal blocks that it audited. Sure it could have. Then the price of coal would have shot up. Electricity costs would have shot up. The poor would not have been able to afford it. And since that would be politically unwise, the government would have had to heavily subsidize power. There are enough problems the power sector is facing –had the blocks been auctioned, the problems would have been even more. If the CAG had its way, that would be ok. It’s better to have no power at all (with all of us living in the dark ages) than to have a welfare state. Ridiculous at its best.
As one political commentator said on TV “Even if half this amount is correct” (meaning if the “scam” is just Rs 5 lac crores), it is shocking. But where is the “scam”? It’s all out in the open. The government has not surreptitiously avoided auctions. It has done so openly. We would like to hear from the CAG what the real scams are. Has someone made money on the side in implementing this welfare policy (very likely someone would have)? Obviously, the CAG is silent on that.
Besides, more than half the so called scam is towards helping PSUs. So is it the CAG’s point that the GOI lost, even though its 100% owned companies made “windfall profits”? (The CAG has apparently now stopped using this word in its report).
Sure, there may be a case today to charge taxes on windfall profits. And sure that would be a healthy public debate to start off. But to say that there was a loss to the exchequer is bizarre.
The exact same thing had happened in the 2G “scam”. The real scam was in what Raja allegedly did. There is an allegation that his party – the DMK – got Rs 200 crores in “deposits” from DB Realty. The CAG didn’t bring this out. The CBI did. The CAG preferred to bring out a sensational report accusing the government of having lost money. The CAG forgot that the 2G spectrum was no auctioned as a specific and thought-through policy decision. The same policy had been followed in this country since the beginning of the telecom revolution. Even the Supreme Court went overboard on this subject when it ordered against FCFS in totality. Thankfully, the Government has appealed that order.
It would be bizarre if the CAG and the Supreme Court were to start making policies. Neither of them is an elected body. Neither represents the people of the country. The SC can easily overturn the Government’s appeal with no explanation owed to anyone. Likewise, the fine balance between institutions is being challenged here by the CAG.
The CAG similarly put a sensationalized number of Rs 2 lac crores in the S-band Antrix “scam”. It had to beat a hasty retreat when it was clarified that the S-band spectrum cannot be compared with 3G spectrum. Did the CAG issue an apology? No way. What about the whole estimate of Rs 1.76 lac crores lost because auctions were not carried out in 2G spectrum? Wait and see….bankers and analysts are wondering if the government will realize even 10% of that number. And that entire 10% will be passed on to consumers. Telecom prices will go up. And we’ll all be forced to pay more to “enjoy” the fruits of the CAG’s labors.
This disastrous working of the CAG should not be made into a political battle. The CAG will devour whoever comes in its way – whether the NDA or the UPA or the Regional parties. The CAG needs to be tamed. It has a huge role to play. It cannot be let to malfunction in this manner.
The real truth is that the CAG has gone overboard yet again. It has forgotten that it has no role to play in policy making. It cannot say whether “no auctions” is good or bad. It can say that in the “no auctions” regime, there was violation of systems and procedures and some people made money or the exchequer lost money. In an environment of hyper-competitive media, the CAG’s callousness can be multiplied many times over. And the country can come to a grinding halt……