Mallikarjun Kharge tells CAG to hold govt accountable for note ban, GST

Senior Congress leader Mallikarjun Kharge on Wednesday asked the Comptroller and Auditor General of India (CAG) to hold the government accountable for demonetisation and the goods and services tax (GST), which caused economic distress, as well as also defence purchases.

President Ram Nath Kovind inaugurated the 29th Accountants General Conference. He said the CAG is not only the keeper of national accounts, but the conscience keeper to the nation. “Good systems outlast bad men and women. This is where you can contribute.”

Kharge addressed the conference as the chairman of the Public Accounts Committee of Parliament.

His demands echoed the Congress, which has been demanding that the CAG conduct a forensic audit in the Rafale fighter jet deal. The party’s delegations have twice met CAG Rajiv Mehrishi in the last one month, as also the Central Vigilance Commissioner on the issue.

Kharge also said the CAG should audit of public-private partnership (PPP) projects, including developments surrounding the Infrastructure Leasing & Financial Services (IL&FS). “New challenges are emerging for the CAG in cases of PPP projects where public money is used to prioritise profits but socialise losses... Recent events, with respect to IL&FS or LIC show how PPP models without oversight can put the country’s financial system at risk,” he said.

Referring to a CAG audit report on the 2G spectrum scam during the Congress-led United Progressive Alliance years, Kharge said the auditor’s reports should not be based on presumptions and assumptions that cast aspersions on other public servants. The CAG report on 2G spectrum allocations in 2012 had calculated that it had caused the exchequer a notional loss of Rs 1.76 trillion.

“A populist report that seeks to build reputation of one institution by undermining public faith in another would serve neither,” Kharge said, adding though the CAG came out with 100 reports a year, there was little publicity unless there was some political interest.

The Congress leader said there was a need for greater independence of the CAG. “The public should not wonder why constitutional authorities are failing to hold governments accountable for decisions that cause serious economic distress such as demonetisation, GST or decisions that involve a huge amount of public money, like defence purchases,” Kharge said.

Former CAGs, who didn’t want to be named, bemoaned Kharge using the CAG platform to score political points. Finance Minister Arun Jaitley is set to address the conference on its concluding day on Thursday. In his speech, Kharge said 'outcome based auditing' by CAG would make the government of the day more accountable.

On demonetisation, Kharge accused the government of shifting goal posts and changing the objective of demonetisation. "Unless the government is forced to spell out the outcomes when it launched its schemes, no one would be able to hold it accountable. We have seen how government shifts goal posts once failures become apparent. For example, during demonetisation the government kept changing the objective of the scheme,” Kharge said.

He said there are people who view CAG’s postmortem analysis as a hindrance to decision making, but this should not deter the official auditor from holding the government accountable.

President Kovind asked the CAG to move towards outcome based auditing and provide “insight and foresight” for improving government programmes. “Through your financial, compliance and performance audits, you have been providing valuable oversight on operations and giving recommendations for improvement. It is the time, the institution thinks of giving insight and foresight as well,” he told the accountants general.

“You may deliberate on how would you as an organisation identify, understand and measure outcome to study the impact of programmes. You may have to realign strategy in a manner that it measures outcome,” the President said.

In his speech, CAG Mehrishi said the official auditor will be able to conduct 100 per cent audit of expenditures incurred and revenues earned by the government provided all the transactions are conducted digitally.