CAG-business standard

The CAG had sharply criticised Reliance Industries and the Oil Ministry for violation of contract over the showpiece KG-D6 gas block and called for revamping the current profit-sharing arrangement that reduces government revenues.

The CAG had also come down hard on the Civil Aviation Ministry over the decision to acquire 111 planes for Air India through debt, calling it “a recipe for disaster” and also on the merger of the two erstwhile state-run carriers.
It had described the merger of Air India and Indian Airlines as “ill-timed” contending that the exercise was undertaken “strangely from the top (rather than by the perceived needs of both these airlines), with inadequate validation of the financial benefits”.

The Comptroller and Auditor General (CAG) has pulled up the Government for not ensuring a “level playing field” for Indian shipping players such as SCI, GESCO, Essar, Mercator, Varun Shipping.

The “vital” policy issues where Government’s “indecision” has led loss of Indian tonnage for the sector include difficult tax regime, grant of infrastructure status to the industry, empowering the Transchart to fix share of cargo to be moved by Indian vessels.

In a report tabled in Parliament on Monday, CAG has also criticised the Government for not taking a decision on the Indian National Shipowners’ Association (INSA) demand to provide preferential treatment to Indian flag vessels owned by Indian shipowners. INSA has been negotiating for a preferential treatment for long term chartering agreement by PSUs for critical energy cargoes of crude oil, petroleum products and gas.

“There is a need to expedite action on above concerns to provide Indian shipping players a level playing field to facilitate them to compete effectively with global players’” CAG has stated in its performance audit report on the Shipping Corporation of India (SCI).

Lack of Government support has resulted in decline in the share of Indian ships in the carriage of country’s overseas trade to eight per cent in 2008-09 from 14 per cent (2005-06). The decline was despite a 34 per cent increase country’s overseas trade during the period

CAG Crossing it limit??????????????????

In 2005, Madras HC said watchdog could brief media

In questioning the propriety and legality of the Comptroller and Auditor-General holding a news conference on its 2G report, Prime Minister Manmohan Singh ignored not only past precedents but also a court ruling upholding the CAG's right to do so.

In his interaction with a group of editors on Wednesday, Dr. Singh criticised the press meet held by the CAG in early January after the report on 2G spectrum irregularities was tabled in Parliament. He said: “It [has] never been in the past that the CAG has held a press conference. Never in the past has the CAG decided to comment on a policy issue. It should limit the office to the role defined in the Constitution.”

But a 2005 judgment of the Madras High Court, upholding the right of CAG and its functionaries to brief the media on the contents of reports prepared by them and presented before the relevant Legislature, leaves no ambiguity on this count.

In P.G. Narayanan vs CAG (W.P.No.23408 of 2004 [2005] RD-TN 714), the High Court dismissed the contention of the petitioner, an MLA belonging to the ruling AIADMK, that the Tamil Nadu Accountant-General had ‘misused his authority' by going to press on an audit report pertaining to the State. The court noted that the CAG had stated in his affidavit “that specific instructions have been given by him to all the Accountant-Generals (Audit) of the States to explain the salient features of the Audit Report to the Press to make the public know about the same after the Audit Report is placed before the respective Legislative Assemblies.”

The veiled criticism by the Prime Minister of the institution of the CAG reflects the unease within the government over the recent CAG reports raising questions of serious irregularities in several deals. The example of the CAG report on the telecom spectrum policy, which gave different estimates for the notional loss to the exchequer on the 2G front, illustrates the point best.

Besides questioning the correctness of the CAG in interacting with the media, Dr. Singh raised two other issues related to the institution. The Prime Minister said the CAG had no jurisdiction to examine issues on policy matters and also contended that the supreme audit institution of the country should take into account the ‘uncertain' environment under which the government is compelled to take decisions.

“We live in a world of uncertainty and ex-post whether it is the Comptroller and Auditor-General, whether it is a parliamentary committee then they analyse post facto. They have a lot more facts which were not available to those who took the decision … We take decisions in a world of uncertainty and that's the perspective I think Parliament, our CAG and our media must adopt if this nation is to move forward.”

CAG sources declined to respond to the Prime Minister's comments. But speaking to The Hindu in the past, they rejected the allegation that the 2G report went beyond their mandate in any way.