Why the CAG's allegations should be taken with a lump of salt and not a pinch
The Government of India is busy attempting to raise a meagre Rs 30,000 crore by the process of disinvestment, the Union Cabinet having already cleared disinvestment in SAIL. The stake sale in blue chip PSUs like BHEL, HAL and Oil India is also in the pipeline. It is said that due to uncertain market conditions, the government in the last fiscal raised only Rs 14,000 crore from disinvestment against the target of Rs 40,000 crore. Meanwhile, the wizard CAG, Vinod Rai, has just pulled a magic figure out of his rabbit hat - hold your breath - Rs 38,00,00,00,00,00. Nobody can ever say that Vinod Rai is either unimaginative or that he thinks small.
Coal India Limited, under whom this precocious number of 38,00,00,00,00,00 is touted to have been lost is a Maharatna Company, which is said to be ahead of the Navaratna Companies and is identified by the following factors: an average annual turnover of more than Rs 20,000 crore for the last three years, an average annual net worth of more than Rs 10,000 crore for the previous three years and an average annual net profit of more than Rs 2,500 crore for the last three years. Look at it this way, the 38,00,00,00,00,00 figure (in Rs) presently given by Vinod Rai can get you all the Maharatna Companies, all the Navaratna Companies and much more. All imports that came into India in 2011 only amount to Rupees 2,51,0266,00,00,000. Now, couple this 38,00,00,00,00,00 with the 1,76,000,00,00,000 loss he claimed the nation had suffered on account of the so called '2G' scam and you have a whopping figure on hand. Give Vinod Rai one more year and he will easily compile losses from which one can easily buy a mid-sized nation like say Greece, whose gross external debt is worth Rs 32416897500000.
In the run up to General Elections, 2009, LK Advani hit a road block. He felt that the combination of Sonia Gandhi and Dr Manmohan Singh under whom the UPA-I was contesting elections was a formidable one. The image of Sonia Gandhi was sky high among the aam Bharat vasis while that of Dr Manmohan Singh was high among the middle class who are identified as BJP Voters. If he were to make an impact on these voters, he would have had to target Dr Singh personally. Dr Singh is world famous and targeting him was a bit of a problem. Fools rush in where angels fear to tread. Advani rolled up his sleeves and began his campaign on twin issues - hang Afzal Guru and that Prime Minister Dr Manmohan Singh was a 'nikamma'. The results of the 2009 election which saw the Congress receiving a little more than 50 extra parliamentary seats shook the top brass of the BJP. How could they criticise the Prime Minister without cutting a sorry figure? Enter Anna Hazare and Baba Ramdev who were told to throw allegations without bothering about its veracity.
If there is a policy paralysis arising out of a fear psychosis which afflicted bureaucrats for a major portion of the last three years, which even major industrialists have spoken about, the CAG and his irresponsibly humungous figures of losses are squarely responsible for it. Several pro-people policies and legislations have been adversely affected; several discretionary relief measures have not been provided by the government owing to this fear psychosis.
Many have hintd at a possib;le nexus between the Public Accounts Committee (PAC) chairman and former BJP president Murli Manohar Joshi and the CAG, Vinod Rai. The CAG gave a similar figure of loss as the PAC. Figures of losses are leaked with regularity by the office of the CAG. Murli Manohar Joshi and other Opposition members are believed to be extremely concerned about constant attacks on the Comptroller and Auditor General (CAG) by the Congress in the Joint Parliamentary Committee and also the demand that he should sit out during certain proceedings of the committee. It has been widely reported that, in fact, the demand that the CAG should sit out can attract a privilege motion against the Congress members. The PAC chairman is also reportedly particularly agitated over such attacks because ostensibly 'the CAG is a Constitutional office and ascribing political intent to calculation of losses during the 2G spectrum allotment amounts to the same misdemeanour as questioning the motives of a Supreme Court Judge behind passing a particular judgment'. The CAG, like the Judges of the Supreme Court and high courts, can be removed only through impeachment by Parliament.
It is now well established by an investigation carried out by a respected newspaper that one of the senior-most officials in the office of the CAG, RP Singh, Director General of Audit (Post and Telecommunications) and the man who headed a team that conducted the audit on the allotment of spectrum and licences, was of the opinion that the loss could not at all be quantified. Singh had opined that the price used for 3G spectrum couldn't be used to calculate the losses because "charging for 2G spectrum was never recommended by TRAI (the Telecom Regulatory Authority of India) or the government has never contemplated any charges for the spectrum other than entry fee".
The CAG is only the titular head of the organisation - meant to oversee issues in general. In the 2G case, Vinod Rai personally took it upon himself to report four figures as possible presumptive (or notional) losses arising from the way the government chose to allot spectrum to companies in 2008: Rs 67,364 crore, Rs 57,666 crore, Rs 69,626 crore and Rs 1,76,000 crore.
Singh's team, however, did finally venture to put a number to the losses to the Government - a measly Rs 2,645 crore - which arises exclusively from inflation. Meanwhile the Telecom Regulatory Authority of India (TRAI) has told the CBI that the allocation of 2G spectrum has earned profit between Rs 3,000 crore and Rs 7,000 crore for the government. The 2G licences are now slated to be auctioned for 18,000 crore, a far cry from the 1,76,000 crore stated to be lost by the government in the 2g allocation.
In its report of October 2, 2011, another newspaper has exposed the CAG's expression of dismay that Singh had written to the DOT seeking their comments. It is therefore clear that the CAG wished to hold the government guilty without even seeking the government's version of events. It is like your chartered accountant reporting to the Income Tax that his client as a defaulter without even as much as offering his client an opportunity to explain.
The CAG is a constitutional body and could have been told by the Supreme Court of India to afford the DOT a final hearing on the issue by placing all facts before it. The celebrated Justice Frankfurther had held: "Audi alterem partem- hear the other side!- a demand made insistently through the centuries, is now a command, spoken with the voice of the Due Process Clause of the fourteenth amendment against state governments and every branch of them... whenever any individual however lowly and unfortunate asserts a legal claim." Alas, even the Indian Supreme Court held A Raja guilty without hearing him at all!
Union Minister for communication Kapil Sibal has earlier been on record to state "That is exactly what we wanted to do; spread tele-density, ensure that there is money in the pocket of the consumer, that the cost of telephony is much less for the consumer, there is greater competition in the market, the cost of having a mobile phone is less. All these objectives are for public welfare. Ultimately remember this, technology is not for revenue earning, technology must reach people and reach people at a cost that helps in their welfare. Raja allowed licenses to come in 2007 and the cost to the consumer in 2007 in telephone was Rs 275 per month. Between 2007 and 2010, that cost came down from Rs 275 to Rs 111. If you look at it in revenue terms, it is benefit to the consumer to the extent of Rs 2 lakh crore almost."
He later provided the following analogy to explain the fanciful figure of loss given by the CAG: "If you build a highway, you give land free, land free that is a big cost to the state. Why do you do it? Why because if you start auctioning land for education, the cost to the poor student would be to the tune of lakhs of rupees."
Vinod Rai's predilection for embarrassing the government of the day, resulted in his own embarrassment on another issue when another reputed daily carried an 'expose' stating that the "CAG which has severely criticised the government for showing undue haste" in concluding the 50-Boeing aircraft deal for Air-India in its latest report, had said the exact opposite in 2005-06: it had then urged the national carrier to "firm up its future fleet composition at the earliest". This has not prevented Vinod Rai from stating that the national carrier had lost a few thousand further crores in his latest report. In 2009, he handed out a report that stated the loss to be 1,76,000 crore in the 2G spectrum sale. The CBI case is that Raja enriched himself or those close to him by about Rs 500 crore. Where is the remaining amount? The CAG leaves that to people's imagination. This sets the stage for making claims that the outstanding money must be lodged in Swiss Banks, something that gives the role of Baba and Anna a whole new meaning.
When the Thiruvananthapuram treasure at the Anantha Padmanabhaswamy temple yielded a treasure worth Rs 1,00,000,00,00,000, one nearly jumped with joy since our national debt could be written off right away. But then, why are we bracketed by the UNDP as poor if only one sector of our economy has such enormous rich potential? Why are we still bracketed among the developing nations of the world? Why does a private company like Wal-Mart have more employees than our national carrier- the Indian Railways?
These worries do not, however, daunt the CAG, All he requires is some figure of loss - if not real, he presumes one. Henry Lamm, the celebrated Chief Justice of Missouri said, "Presumptions", as happily stated by a scholarly counsellor, "may be looked on as the bats of the law, flitting in the twilight but disappearing in the sunshine of actual facts."
More about Brijesh KalappaBrijesh Kalappa, an advocate in the Supreme Court, is the Additional Advocate General, Haryana. A former journalist, he has a wide range of interests including reading and travelling. He has worked with several legal luminaries on subjects of importance in civil, criminal, water and electoral laws and has individually represented governments, eminent individuals and major industrial houses. Gifted with the prowess for distinctive sharp-edged analysis, he has been working closely with several leaders of the Indian National Congress.
- + December 6, 1992: The Day that changed India
- + Bihari manoos, rest in peace
- + Of Vadra's riches and Kejriwal's endless accusations
- + The Khalistan episode cuts both ways, requires healing and reconciliation
- + Anasuya's dream rhapsody
- + Decoding Winston Churchill's hatred for India
- + Olympics, Oscars and the Nobel - a laggard's tale
- + Pakistan SC: Paving the way for military rule?
- + Reforming the rail