CAG reporting of GOI expenditure slows down, reports not presented to Parliament, transparency & autonomy in peril say former civil servants

In an open letter to President Draupadi Murmu, 86 former civil servants have expressed concern with the deliberate absence of autonomy in CAG (Comptroller Auditor General) mandated as a constitutional authority to oversee the specifics and ethics of government spending. In an open letter to the President released today, the signatories have pointed out that CAG reports have shrunk down from 54 Reports on various government departments in Year 2015 to 43 in 2016,  50 in 2017, 19 in 2018 and only 17 in 2020. In Year, the CAG made public only 28 reports and last year, 2022, 30 reports. The current year so far, Year 2023 has 16 CAG reports made public.

This means either that the working of the CAG has slowed down, or that the organisation, despite detection of flaws in expenditure by the government, is reluctant to present this to Parliament and make the information public.

Since August 2020, the present chief of CAG is Girish Chandra Murmu, IAS since 8 August 2020, a former Gujarat based civil servant who served closely with then chief minister of Gujarat, Narendra Modi. CAG reports directly to the President of India and is appointed by that office.

The group of former civil servants –calling themselves the Constitutional Conduct Group (CCG) of the All India and Central Services who have worked in the Central and State Governments during our careers. As a group, we have no affiliation with any political party but believe in impartiality, neutrality and commitment to the Constitution of India.

The letter states that “any vibrant democracy requires an effective system of checks and balances to prevent the arbitrary use of power by an elected government and such checks and balances can be exercised only through independent institutions, which are able to withstand pressure from the executive or any vested interest.

“The Comptroller and Auditor General of India (CAG) is one such institution which has been exercising oversight over government activities and expenditure for more than 150 years now. It has, by and large, an untainted record of objectivity, political neutrality and a robustness of its internal control system that ensures complete accuracy of the facts and figures reported.

“The Constitution of India requires the CAG to affirm that s/he will duly and faithfully perform her/his duties “without fear or favour, affection or ill-will”, again confirming her/his complete independence from the executive. The CAG works quietly, away from the glare of publicity, submitting its report to the President, who then causes the reports to be laid before Parliament. The reports are thereafter examined by the Public Accounts Committee, and are available in the public domain, ensuring public accountability of the executive. Without an effective and independent CAG, proper financial management of public funds by the government will be rendered ineffective.

“Unfortunately, in recent times, these high standards seem to be waning.  The institution of the CAG does not seem to be discharging its duties with the speed that it is expected to, or that it had in the past. The number of audit reports relating to the union government’s functioning which have been submitted before Parliament has shown a declining trend as may be seen below:

“Year 2015: 54 reports; 2016: 43 reports; 2017: 50 reports; 2018: 19 reports; 2019: 18 reports; 2020: 17 reports; 2021: 28 reports; 2022: 30 reports; 2023:16 reports.

“This means either that the working of the CAG has slowed down, or that the organisation, despite detection of flaws in expenditure by the government, is reluctant to present this to Parliament and make the information public.

“Ever since 2012 when the CAG presented its reports to Parliament on the loss reportedly suffered by the nation due to the wrong allocation of coal mines by the government, and alleged errors in the 2G spectrum auction, there has been considerable interest among citizens and political leaders to find out from the CAG’s reports whether or not the government has spent the taxpayers money properly. The low number of audit reports and the lack of discussion in Parliament on the reports, denies them that right.

Present Year, 2023: CAG Reports

The Open letter states that, “In 2023, 16 reports of the CAG relating to the union government’s working were placed in Parliament. These reports highlighted several instances of wrong or excess expenditure by the government and government bodies. Among the most egregious of these cases are the significant cost over-runs on road projects of the National Highways Authority of India (NHAI) and other related bodies, and the false records of expenditure under the central government’s flagship health scheme, Ayushman Bharat.

“On the road and highway projects undertaken by the NHAI, the CAG has found several irregularities in the award and implementation of the projects, such as the successful bidder not fulfilling tender conditions, or bidders selected on the basis of fake documents, or award of works without availability of detailed project reports, or award of works based on faulty project reports, etc.

“For instance, in the NHAI’s project of the Dwarka Expressway, under the Bharatmala Pariyojana Phase 1, the CAG observed that the Cabinet Committee on Economic Affairs had approved the project for an amount of Rs 18.20 crore per km whereas the actual cost incurred was a whopping 250.77 crore per km, exceeding the allocated cost about 14 times! In many other cases, too, significant changes were made to projects which included changing the specifications, resulting in the construction cost increasing sharply.  Also, the detailed reports prepared by consultants were not appraised with due diligence by the competent authority before approval of projects. Consequently, there are “instances of different specifications adopted by contractors or concessionaires at the time of execution of projects than what were prescribed by detailed project report consultants. . . . .”

“Several serious flaws were similarly found with the expenditure relating to the government’s Ayushman Bharat scheme or Pradhan Mantri Jan Arogya Yojana (PM-JAY), meant to give health cover to over 10 crore poor families. The CAG mentioned that in the case of 88760 patients who had died during treatment, 214923 claims were made at a later date for fresh treatment of these very same patients.

“Despite the CAG pointing this out, and the National Implementation Agency that implements the programme undertaking that the loophole that existed would be plugged, fresh claims of treatment continued to be made for patients earlier shown as dead.  The CAG has also identified 4,761 registrations that were linked to only seven Aadhar numbers, indicating potential irregularities. Again, fraud is probable in the fact that hospitals had registered 7.5 lakh patients under the same dummy phone number, viz. 9999999999, and another 1.4 lakh patients under the number 8888888888

“What is even more worrying is the fact that, shortly after these reports became public, the CAG transferred the officers responsible for these reports to other positions, giving rise to the suspicion that they had been punished for being honest and upright and exposing the misdeeds of government agencies. These officers have been posted to unimportant positions such as Legal Officer (though the person concerned has no legal background) or to the Rashtra Bhasha cell, etc. and in some cases sent far away from their present place of posting. What is even more serious is that field audit has been suspended subsequent to the media attention. Stoppage of field audit work means that the CAG has become dysfunctional. It is a serious constitutional misconduct.

The Open Letter also criticises the tendencies of the elected officials and Ministers in the present government to publicly criticise the reports, stating that this undermines both the credibility and authority with which CAG is supposed to function and work.

In this  connection, the letter states that,

“Another worrying trend has been statements made by ministers and public functionaries to the media against the CAG reports. The CAG does not and cannot take part in such public discussions and this undermines the authority and credibility of the CAG’s work. While the ministries and departments of the government have tried to provide explanations for these issues, it is interesting to find that the ruling party MPs have jumped into the fray to defend the government. One minister has gone public against the CAG report on the Dwarka Expressway, pointing out apparent errors in the CAG report; in another instance, the Ministry of Finance has rebutted a news report published in The Telegraph dated October 17 2023 on CAG’s observations on government accounts, giving elaborate point-wise replies to each observation of the CAG. Since the CAG cannot enter into a public debate on the statements made by Ministers and officials, the discussions become one-sided. The right approach would have been to have responded to the CAG’s observation before the reports were finalised, at the time that the CAG’s observations are forwarded to the concerned authorities for their response.  This ensures the objectivity of the CAG’s reports and protects the constitutional institution from avoidable, untrue and uninformed media controversy, resulting in an erosion of the credibility of the institution,

Finally the letter states that,

“The trend that we are currently witnessing is indeed disturbing. The CAG has, with a few exceptions, almost always worked with absolute transparency and fairness, and this seems to be in jeopardy now. We, therefore write to request you to exercise the authority of your office to ensure that the objectivity and independence of the institution remains uncompromised and that the established processes and controls are not tampered with. Such tampering will greatly damage our democracy.”

The signatories to the communication to the President are:

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