Newsmaker: Vinod Rai

A resonating report on spectrum and an avalanche of controversy

As a passionate mountaineer, Comptroller & Auditor General (CAG) Vinod Rai — head of the country’s apex government auditing agency — is probably used to uphill tasks. But few of his endeavours can compare to the avalanche of controversy resulting from his resonating report on 2G spectrum allocation, which was tabled earlier this week in the Parliament.

His report, indicting the department of telecommunications for causing a potential loss of up to Rs1.8 lakh crore to the exchequer due to allotment of 2G licences at the rock-bottom price of Rs1,651 crore has snowballed into a major controversy, with a minister losing his job and several leading industry groups facing a major embarrassment.

Former telecom minister Andimuthu Raja, belonging to major ruling coalition partner DMK, was forced to resign last Sunday on account of the CAG report. Business houses such as Unitech (Uninor), Essar (Loop Telecom) and Videocon (Swan) are the ones left fuming after the report suggested that they were ineligible for 85 out of 122 telecom licences issued in 2008 on account of serious procedural lapses.

According to political observers, this is the first time the apex auditor has shown the courage to take on the mighty the way it has done in the 2G case. While the office of the CAG is historically known for pulling up government ministries for wasteful spending, its focus on big-ticket transactions and systemic problems to ensure greater value for every rupee of public money spent is a rather new experience.

In other words, it is not the constitutional role of the institution that has changed, but CAG’s priorities. Its brief now is not to look for fire behind every plume of smoke, only the big ones.

As Vinod Rai would put it, his office no longer conducts a post-mortem on petty faults in government functioning. It undertakes “performance audits to provide government an objective and clinical analysis of the efficiency and outcomes of budgetary plan expenditures”.

“We no longer focus merely on audit of government expenditure. Our focus is on the outcome of such expenditures,” Rai says, attributing the change of direction to the reforms that have swept the economy and governance.

The telecom spectrum audit is not the most important task Rai has taken up after becoming CAG on January 7, 2008. His office is also in the process of auditing the capital expenditure of Reliance Industries Ltd’s (RIL’s) K-G Basin gas fields. A CAG team is inspecting the accounts of the Commonwealth Games organisers to verify whether public money has been wasted. The broadbased audit on CWG expenditure will be completed in three months, as Rai felt the need to fast-track the audit work.

Rai has also embarked on an ambitious venture to get legislators’ support for major amendments to the law that governs CAG. The idea is to empower CAG to inspect all government expenditure, unlike at present where his team does not have a legal mandate to access the books of several organisations that are not strictly government establishments. With over 50 per cent of government spending, especially to flagship social projects, going to panchayati raj institutions, non-governmental organisations and private-public partnership programmes, Rai seems to be on the right track.

CAG is also becoming media savvy these days. Press conferences and media interactions have become more frequent and people are today aware of the critical responsibility borne by the institution, an official attending the 150th anniversary of the institution in Delhi said. According to him, CAG’s visibility has increased a lot, and its observations are grabbing more headlines these days.

Good for Rai’s team, though he himself might say it’s the larger public good that matters more. A 1972 batch Indian Administrative Service officer of the Kerala Cadre, Rai holds a master’s degree in economics from the University of Delhi, and master’s in public administration from Harvard University. In addition to mountaineering, he also has an interest in tennis and cricket.