Friday, February 8, 2013

CAG at it again….someone should rein him in

I get it. The CAG is a constitutional authority and I shouldn’t be breaking protocol by criticizing him so bluntly. But then shouldn’t he also understand what protocol is? Even if he doesn’t understand what his role is? The CAG is one messed up man; and someone simply needs to rein him in.

It’s a common decorum even opposition leaders keep when they speak abroad. They speak well of the country. Even when they raise issues of concern and bring up our several flaws, they speak in a way that shows that the country cares for them and is working on correcting them. No one goes out and speaks ill of the government in the accusing way in which the CAG spoke at the Harvard Kennedy School. No one uses the platform for political speeches. For this alone, the CAG should be ticked off. He should be restrained and cautioned. But politics being what it is, this will be impossible to do.

Now coming to the other point the CAG made. The CAG has accused the government of not wanting it to go beyond accounting. But does any auditor go beyond accounting? Digvijay Singh of the Congress has asked the question if the CAG is a political office or a constitutional one with a specific job assigned to it? If it’s a political office, which would allow the CAG to comment on policy, then the CAG should be appointed by an election. But if it’s a constitutional office, then it should follow the prescription of the constitution. The prescription is that the CAG may audit any government policy, but only to find out if its been executed well. Or if there are leakages, or corruption, or other failures. The CAG is right in pointing out the flaws in execution of NREGA, but the CAG cannot question if NREGA is the right policy or not. Likewise, it is right to bring up what appears to be a massive case of implementation failure in the farm waiver scheme announced by the Congress in 2009, but it cannot question if that was the right thing to do or not. That the BJP can do, but sometimes, the two (CAG and BJP) behave as if they are two sides of the same coin!

If the CAG is so concerned with policy, as it showed it was with 2G and CWG (more later), then may I ask why the CAG has still not brought out a report alleging what could be as much as a Rs 10 lac crore “loss” on sale of petro products at subsidized rates? More specifically, why has the CAG not brought out the huge loss as a result of kerosene and diesel subsidies? Surely, if the government charged full rates, then the government’s coffers would be fuller? I will tell you why the CAG has not brought out this report. Because if the CAG did that, it would get discredited by all political parties. We saw that recently when the government finally increased diesel prices and introduced subsidized-LPG quotas. All political parties demanded the steps be rolled back. So all parties actually support a higher “loss” on petro products! Is this why the CAG doesn’t audit this subject? Clearly shows that the CAG has at least one eye on the political situation in the country. 

Now coming to my pet subject of 2G auctions, and the CAG’s completely bizarre report of loss – based on 3 different formulae mind you. The only reason that subject is still alive is because the Congress has handled the situation in a hamhanded manner. Rather than backing Kapil Sibal’s correct assessment that the loss was zero, it chose to be contrite and make amends. Sibal was right. Yes, the government voluntarily chose a low license fee regime. Yes, it pegged pricing at 2002 levels. Yes, the PM and FM were involved in the decision as they would be. If they had said yes to it all, they would have been in the clear. But they told Sibal to back down. They “made amends”, and the results are there for all to see. Telecom pricing is rising. Telecom penetration is dropping. With more price rises in the offing, the penetration will dip by another 100-200 million subs. And these will be the poorest sections of the population; the ones that TV news channels and newspapers don’t care about. The middle class has assaulted the poor all over again; all thanks to the CAG. The only hope is that the auctions will continue to fail; so I will keep my fingers crossed. In the meanwhile, the 3G policy, on the basis of which the entire 2G loss estimate was built up, is floundering. 3G pricing is monstrously high, thanks to the “successful” auctions; and penetration is at 10% of planned levels. Good going, CAG.

In the meanwhile, the real “scam” numbers are starting to emerge. So far, and make a note of this dear readers, the ONLY case is against Raja, and that too for just Rs 200 crores (I am using “just” only in the context of the Rs 1.76 lac crores the CAG reported). There is no money trail from Unitech or DB group to any politician. Reliance’s crime was merely not following the policy of not having more than 10% stake in a second telco in the same circle, for which there would be suitable penalties prescribed in the policy itself. Chidambaram has been acquitted. And Raja has got bail. One auction has flopped. And the reserve fees have been slashed by between 30% and 50%. And like I mentioned earlier, 2G pricing has increased 25-50%. And many poor people are now without phones in their hands. Must compliment the CAG for this!
Ditto with respect to the Rs 1.86 lac crore coal block auctions. Again, there is no money trail leading to the ministers; yes there is some possibility of some wrongdoing by some politicians; both from the BJP and the Congress. Again, the CAG’s mandate should have been to focus on implementation of policy; instead it chose to focus on the policy itself. If it knew its job, we would have had much more “cleaning up” and much less “muck raising” as we have seen.

The real truth is that that Mr Rai has lowered the dignity and prestige of his office, by firstly, making it political and second, by breaking protocol and harming the country’s image. Someone needs to rein him in. Mr. Rai is no Seshan; he is just another General VK Singh. I am sure we’ll hear more about his political plans after he retires shortly….

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