Saturday, December 29, 2012

Pathetic Position OF CAG Sri Vinod Rai

India's chief auditor leads battle against corruption

He was supposed to be a faceless accountant, but he has become a household name in India and perhaps the central actor in the nation's battle against corruption.

The slim, silver-haired Vinod Rai is the government's chief auditor, a man appointed on the recommendation of the prime minister more than five years ago. Now he has turned into one of the government's greatest scourges, a hero to many but a source of controversy to others.

Rai's reports accusing the government of losing tens of billions of dollars of potential revenue — by giving away natural resources to private companies for a pittance — have dominated news headlines for the past two years.

They have also supplied information for a nationwide anti-corruption movement, helped send a government minister, senior bureaucrats and several business leaders to jail, and damaged the government's image beyond repair.

During a rare conversation in his office, he first admitted and then denied that the government might regret having appointed him, before concluding with a smile that "yes, probably they are surprised in some ways" by the way he has gone about his job.

Surprise would an understatement, for the hard-hitting reports of India's comptroller and auditor general (CAG) have prompted nothing short of fury within India's government and strident attacks from senior members of the ruling Congress party.

Along with a vibrant media, an activist Supreme Court and an increasingly vociferous civil society, his supporters say Rai has made his office into a powerful force for accountability and transparency in modern India.

"This heralds the start of a completely new era of government being forced to become more transparent," said Independent lawmaker Rajeev Chandrasekhar, who said previous incumbents of the CAG's office have often been "poodles of the government."

After a lifetime in India's bureaucracy, the 64-year-old Rai himself admits to a few surprises since being plucked from the Finance Ministry to take over a sprawling network of 63,000 employees, including accountants in every state of India.

"The lack of integrity at high levels of government — certainly it has come as a surprise to me," he said, referring to the amounts of money involved as "mind-boggling."

"The man in the street talks about it but does not have first- or secondhand knowledge of it," he said. "Today, what's happened is citizen groups have come center stage and are seeking a certain level of public accountability, and I think we all owe it to them to bring these things center stage."

Rai is not the first auditor-general in Indian history to bring a government to its knees — a CAG report into huge kickbacks in the purchase of army field howitzers from a Swedish company contributed to the 1989 election defeat of Rajiv Gandhi's government.

But Rai has undoubtedly interpreted his mandate more aggressively than his predecessors, going beyond narrow financial audits to examine how government policies have performed.

His role, he explained, is to oversee government activities and spending, and more broadly to make India's executive accountable to parliament. Once appointed, the CAG enjoys constitutional protection from dismissal, except through a process of impeachment — and he has used that power to devastating effect.

A 2010 report into the telecom sector said the government had foregone billions of dollars in potential revenue by giving away mobile phone network licenses on a first-come, first-served basis, rather than by auctioning them to the highest bidder.

This year, the CAG reported that allocation of coal-bearing land to private companies — again, through an opaque process rather than a competitive auction — had cost the government potential revenues of around $30 billion, despite concerns expressed by the senior bureaucrat in the coal ministry that those private companies were making "windfall profits" from the process.

Most damaging of all, the report revealed a paper trail that led to Prime Minister Manmohan Singh himself, suggesting he was uncomfortable with the process but had not acted decisively to make it more transparent.

Singh, not usually one to betray his emotions, told Rai to mind his own business, accusing him of overstepping his mandate, and complained that the media and the CAG — two of the government's biggest critics — get away with "murder" these days.

Congress party spokesman Digvijay Singh went further, accusing Rai of harboring political ambitions of his own.
Rai shrugs off most of the criticism as a "reflex" defense mechanism from the government, one that just shows he is doing his job.

"It didn't disappoint me, certainly not," he said. "If we call them names, they have every right to call us names. The only thing different now is the stridency of the personal attack, which attributes motives and quite often political aspirations."

Rai is not scared of creating headlines, complaining at the World Economic Forum last month about the appalling "brazenness" with which government decisions were taken.
His style is not to everyone's taste.

Former solicitor general Harish Salve accuses the CAG of "blurring the lines between exposing corruption and revisiting government policy," something he says that must remain the prerogative of the government. Independent economists have questioned the assumptions on which the CAG has based his estimates of losses to the government.

But to criticize the CAG on these grounds is to miss the broader point, say commentators like Pratab Bhanu Mehta, president of the Center for Policy Research.

"In the medium to long run, these [reports] will make the government stronger, not weaker, because it will be forced to ask the right questions," he wrote in the Indian Express after the coal report was tabled in parliament in August. "You can contest the CAG's numbers. But the reports, even if they do not say it, leave us in no doubt the government is a rotting ancient regime."

Rai's six-year term ends in May, but he said he feels confident that pressure from the media and civil society will prevent the government appointing a more pliable figure in his place.

"These strident attacks have evoked a very automatic defense mechanism in the department," he said. "So it's not a case of taking on one guy, it is a question of taking on 63,000 guys."

Under the unforgiving gaze of this new transparency, India's bureaucracy and government have sometimes seemed paralyzed, with even senior officers reluctant to take responsibility or make decisions. Rai dismissed this as "an alibi for non-performance," and said the government would learn to make decisions that withstand public scrutiny.

"It's quite a watershed," he said. "I am very upbeat, very bullish on this. This was a churning which was necessary in society, and it has come."


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