What can CAG examine? PDF Print E-mail
Thursday, 03 February 2011 00:00
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Since the government has repeatedly argued, including in affidavits before the Supreme Court in the CVC and A Raja cases, that the CAG does not have the jurisdiction to examine ‘policy decisions’, and the issue is going to keep coming up, we need some clarity on the matter. From the Supreme Court if need be. If, to take an example, the government gives out land worth Rs 100 crore for Rs 1 crore (roughly the kind of crime BS Yeddyurappa is accused of), can the CAG bring it up, or is it a ‘policy decision’? The CAG seems to think it has the power to do so, but the government is of a different view. Since the CAG is increasingly asking questions on ‘policy decisions’, it is important to resolve the issue of jurisdiction—the last thing we want is a repeat of the government-CAG standoff on the 2G scam.

In the past few weeks, for instance, newspapers have carried news stories on the questions the CAG has asked the aviation ministry on its purchase of 111 planes for Air India for Rs 50,000 crore. The CAG is also auditing the expenses by Reliance Industries Limited on its KG-D6 gas fields. So if the government is later going to say the CAG has no right to examine these costs, why are we even going ahead with the process? The questions the CAG is posing are certainly relevant and need to be asked. In the case of Air India, for instance, there is still no clear justification for the expenditure. Was it just to save the jobs of 30,000-odd persons who work for Air India? After all, there are enough airlines out there for the flying public to not even notice if the airline went out of business. It is also true that even if Air India was as efficient as the best in the world, it cannot service the debt burden without Rs 10,000-odd crore of fresh equity from the government and an equally large concession on debt—so how did the government justify this? In a similar situation, when BSNL wanted to order mobile phone equipment, the government turned it down, saying its falling market share didn’t warrant a big order—like Air India, BSNL also argued it was the capacity constraint that was responsible for its falling market share.

The government will argue that the only body that can ask such questions is Parliament. While there is no automatic mechanism for executive decisions as the Air India one, which was cleared by a Group of Ministers, to go to Parliament, the fact is the CAG is an arm of Parliament—its reports are submitted to Parliament’s Public Accounts Committee, which decides to accept or reject the findings. So if the CAG reports to Parliament, surely the CAG is entitled to ask questions on its behalf? Can we have some clarity on this?


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