In a virtual
reversal of its earlier judgments, the apex court gave a jolt to CAG Vinod Rai
by rejecting his Rs one lakh crore “national loss” philosophy in the
Cairn-Vedanta deal. The judgment largely went unreported in the National Media and TV channels
The problem
with moral crusade against corruption is that it makes some of the crusaders
blind to the legal nuances of the evils they are fighting. Too ready to cry
“off with their heads”, they have little patience to hear the defense argument,
or to double-check the prosecution’s logic. Finally, it is left to a
constitutional authority, like the Supreme Court, to put a brake on the
crusaders’ zeal.
What should
particularly gall activists like Agarwal, or his lawyer Prashant Bhushan, also a
man in a perpetual state of moral outrage, is a pointed observation by the
judges that CAG reports, despite their respectability, were no “gospel”. Though
the CAG is a constitutional body, and has wide powers in its ambit, its
conclusions are still not the stuff on which election outcomes should be made
or unmade, or the faces of targeted public officials be painted black. Besides,
CAG ought to submit its report to none other than the Public Accounts Committee
of Parliament. And rightly so. In a democratic republic, it is only proper that
the elected legislators alone have the power to pass a moral judgment on public
transactions. The CAG, at best, is an arm of Parliament--certainly not the
other way round.
The
Comptroller and Auditor General of India has a glorious track record otherwise,
having been Parliament’s watchdog for all large-scale fiddles, including the
infamous ‘fodder scam’ of Bihar under Lalu Prasad Yadav. However, Vinod Rai,
the current CAG, has, since his induction to the office in 2008, brought a
rather unorthodox underpinning to his
audit, which is that of churning out a notional loss figure—an amount which, he
argues, the state would have been richer by if the concerned public decision
were avoided, or done differently. In the fodder scam case, red-flagged by a
previous CAG, the amount of loss in question was measured by what the offenders
had pocketed. But under Rai, CAG switched its focus to the perceived loss to
the public exchequer—a gargantuan Rs 176,000 crore for distributing 2G telecom licenses without public auction,
or a perceived loss of an even larger amount of Rs 185,550 crore for allocation
of coal mining blocks to coal users. These are big numbers and, as such, are an
effective tool of public communication, as economist Amartya Sen has recently remarked
that one should pinpoint the number of women and children who’d die if the opposition
parties continue to keep Parliament paralysed, thus putting the key Food
Security Bill in limbo.
However,
since 2010, the year of the “2G scam”, CAG’s mysteriously leaked audit reports
have been the Opposition’s grist to the mill, and the ‘number effect’ has
numbed public opinion to such an extent that there is hardly any public
spending that escapes citizens’ suspicious scowl. In effect, it has decelerated
governance to a dangerous extent, and is the real reason behind the ‘policy
paralysis’ that the UPA-2 has so often been accused of. This is not to say that
the un-auctioned allocations—be it of 2G license or coal blocks—are entirely
corruption-free. Some users are not bona
fide and some had unashamedly violated the terms of license. But these are
criminal violations for the police to investigate and prosecute, if necessary.
In defining as notional loss the public spending to achieve social targets—be
it a high tele-density, or increasing energy availability—CAG under Rai has
queered the pitch not for this government alone but for all governments in
future. By the same token, it is easy smell public corruption in every welfare
institution of repute built since the Second World War, including Britain’s
National Health Service or the US Social Welfare program.
It is a
different matter that the Supreme Court had in the past taken a lenient view of
the CAG’s audit philosophy. In the Cairn-Vedanta case, though, the issue is not
the propriety of CAG computing of loss to the nation, but its correctness. The
apex court has expressed completely contrary view of what had been held on
earlier occasions. The two-judge bench doubted CAG’s by now routine assumptions
that deals between the state and the private sector are not clean, its obverse
side being that the public sector is essentially honest and efficient. Rai had
assumed that ONGC, a public sector oil exploration behemoth of questionable
efficiency, could manage Cairn’s Rajasthan wells better than Vedanta would; and
that the state has to pay a colossal amount in opportunity cost for allowing
Vedanta to acquire ownership of the wells. Rai is clearly a statist in the
Twentieth Century mould, a philosophy that has condemned India to the Third
World status despite its proven growth potential. It is ridiculous that even
liberal-minded politicians take Rai’s numbers as what the court has aptly
described, as “gospel”.
(The author
is National Editor of Lokmat group in Delhi)
