Changing Role of Indian Auditor General

Going Beyond Mere Accounting: The Changing Role of India's Auditor General
Author(s): RONOJOY SEN

Source: The Journal of Asian Studies, Vol. 72, No. 4 (NOVEMBER 2013), pp. 801-811, 1035
Published by: Association for Asian Studies
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© The Association for Asian Studies, Inc., 2013 doi: 10. 1017/S002191 1813001642
Going Beyond Mere Accounting: The Changing Role

of India's Auditor General
RONOJOY SEN
In delivering
deliveringearly 2013,at aHarvard
a speech speech University's
India at s then Harvard
Kennedy comptroller
School, wonderedUniversity's
whether his and auditor Kennedy general School, (CAG), wondered Vinod whether Rai, while his
office should be confined to being "mere accountants/' That this question could be
raised in a public forum, and that too outside India, spoke to the transformation in
recent times of Rai s stature and the office that he held. The winds of change were
reflected in the Indian Supreme Courts rejection in 2013 of a public interest litigation
challenging the authority of the auditor general, who is a constitutional authority, to
conduct performance audits of the government. Significantly, the Court ruled, the
"CAG is not a munim [accountant] to go into the balance-sheets. The CAG is a consti-
tutional authority entitled to review and conduct performance audit on revenue allo-
cations . . . and examine matters relating to the economy and how the government
uses its resources."1
For most of its 150-year-plus existence, the auditor generals office has been a scru-
pulous but relatively unglamorous bookkeeping institution. This is best illustrated by a
stoiy told by John Masters, an officer in the British Army in India in the 1930s and
1940s and author of several books.2 In the 1940s, a young lieutenant in Multan
(in present-day Pakistan) apparently eloped with an Anglo-Indian woman, taking with
him money from the regimental coffers. His superior, a major, followed him by train
and then took a taxi to track down the love-struck lieutenant in Lahore and recover what-
ever was left of the stolen money. When the major claimed reimbursement for his trans-
port costs, however, his claim was rejected by the auditor general s office on the grounds
that he should have used his horse, provided by the Army, and not incurred wasteful
expenditure.
One of the architects of the Indian Constitution and independent Indias first law
minister, B. R. Ambedkar, had no doubts about the importance of the auditor generals
office. Speaking about the office, Ambedkar said during the Constituent Assembly
(1946-49) debates, "This dignitary or officer is probably the most important officer in
the Constitution of India . . . and his duties . . . are far more important than the duties
even of the judiciary - he should have been certainly as independent as the Judiciary."3
Ronojoy Sen (isasrs@nus.edu.sg) is Senior Research Fellow at the Institute of South Asian Studies and the Asia
Research Institute at the National University of Singapore.
The Hindu , October 1, 2012.
Fali S . Nariman, "A Question of the Right Balance," The Hindu , August 15, 2007.
Constitution Assembly of India, Volume VIII, Constituent Assembly Debates, accessed September
10, 2013, http://parliamentofindia.nic.in/ls/debates/vol8plla.htm.
802 Ronojoy Sen
Until recently the auditor generals office had done little to match up to Ambedkars
vision. From 2010 onwards, however, the office has been the talking point of the
country, with Rai being the subject of cover stories, regularly appearing on television,
and even being chosen as "Person of the Year" in 2011 by Forbes magazine. In their
report on the allotment of telecom licenses (2010), or what is commonly known in
India as the 2G spectrum scam, the two reports on the 2010 Commonwealth Games
(2009 and 2011) held in New Delhi, and most recently their report on the allocation
of coal fields (2012), Rai and his team unearthed irregularities and graft in government
projects and policies that left the Congress Party-led coalition government acutely embar-
rassed and provided considerable ammunition to the opposition.
In this essay I explain why and how the office of the auditor general, which has been a
relatively low-key bookkeeping institution for most of its career, has suddenly shot to pro-
minence. By looking at the auditor generals past record and its constitutional remit,
I suggest that the revelations in the reports were just one reason for their impact.
The way the recent reports were presented and their timing contributed equally to
the ripples they created. I also suggest that the auditor general s office, much like the
Supreme Court and the Election Commission, might play a greater role in Indian democ-
racy in the future. But as with the other two institutions, we should be wary of burdening
it with expectations beyond its remit.
Why the Fuss Now
While the auditor general's office churns out reports by the dozen every year - many
of which sink without a trace - at least the four above-mentioned recent reports have had
a cataclysmic effect. The contents of the reports had a lot to do with their impact. Possibly
the most explosive was the audit report on the "Issue of Licences and Allocation of 2G
Spectrum."4 It examined 122 2G spectrum licenses issued by the federal department of
telecommunications in 2008, finding several irregularities in the allocation process,
which was done under a "first come, first served" policy. Among these were the following:
the licenses were issued at 2001 prices; the views and recommendations of the Telecom
Regulatory Authority of India, the Finance Ministry, the Ministry of Law and Justice,
and even the Prime Ministers Office on how the spectrum should be priced and sold
were ignored; the rules of the allocation process, which included a one-hour window on
January 10, 2008, for licensees to apply, were changed arbitrarily and lacked transparency;
and licenses were issued to ineligible applicants. The most damning indictment of the licen-
sing process was, however, the "presumptive loss" to the exchequer on the spectrum allo-
cation. The value of the loss was pegged at a staggering Rs 1.76 trillion (US$40 billion).5
Comptroller and Auditor General of India, Performance Audit Report on the Issue of Licences and
Allocation of 2G Spectrum by the Department of Telecommunications Ministry of Communications
and Information Technology , accessed September 10, 2013, http://cag.gov.in/html/reports/civil/
2010-ll_19PA/Telecommunication%20Report.pdf.
For the monetary amounts in the CAG reports, the conversion rate is the one prevailing at the
time the reports were published. For the other amounts, the rate is the one prevailing at the
time this article was prepared for publication in September 2013.
Going Beyond Mere Accounting 803
The audit report on "Allocation of Coal Blocks and Augmentation of Coal Pro-
duction," too, focused on the allocation of a scarce resource.6 The main objection was
to the way in which 142 coal blocks from 2004 onwards were allocated by the Ministry
of Coal. According to the report, the ministry s screening committee did not operate in
a transparent manner and disregarded the suggestion that the coal blocks be allocated
through a process of "competitive bidding." The similarity with the report on the 2G
spectrum allocation did not end there. It put a figure to the estimated "financial gains"
accruing to the private players who won bids for the coal blocks, pegging it at Rs 1.86
trillion (US$33 billion).
How were these figures, both mindboggling and controversial, arrived at? In the 2G
spectrum case, the auditor general made its calculations on the basis of the prices at
which the 3G spectrum was auctioned in 2010, bringing a windfall gain of around Rs
677.19 billion (US$14.6 billion) to the government, and the value of the stakes sold by
the new licensees to foreign investors. There was no similar benchmark for the coal allo-
cation report, so the CAG used the average cost of production and the average sale price
of open cast mines of the government-owned entity, Coal India Limited, in 2010-11.
The reports on the 2010 Commonwealth Games were somewhat different from the
other two reports in that they documented irregularities and inefficiencies in the staging
of what was the biggest multi-sport event held in India. The first report, published in
2009 during the run-up to the Games, reported a lack of coordination among different
agencies, serious delays in project implementation, and a considerable increase in the
costs of hosting the Games from what was originally budgeted.7 The second report, an
audit of the Games after they were held, was published in 2011. 8 One of its primary find-
ings of the report was the continual ramping up of the budget of the Games from Rs 12
billion (US$266.7 million), mentioned in the initial bid, to approximately Rs 185 billion
(US$4.1 billion). The reasons for the cost inflation, according to the report, were a "pie-
cemeal" approach to the organization of the Games and "delays at different stages."
Besides, it found that the hiring of contractors and consultants and the award of
tenders in many instances was "arbitrary and ad hoc."
There were three broad reasons for the reports having a much greater impact than
usual. First, they stood out because of the scale of the graft, particularly in the allocation
of the 2G spectrum and the coal fields, that they professed to expose. Most importantly,
they put a precise figure to the loss incurred by the exchequer, estimated to run into
Comptroller and Auditor General of India, Report No. 7 of 2012-13 for the Period Ended March 2012
- Performance Audit of Allocation of Coal Blocks and Augmentation of Coal Production (Ministry of
Coal), accessed September 10, 2013, http://saündia.gov.iiVengHsh/home/Our_Products/Audit_Report/
Government_Wise/union_audit/recent_reports/union_performance/2012_2013/Commercial/Report_
No_7/Report_No_7.html.
Comptroller and Auditor General of India, A Report on the Preparedness for the XIX Common-
wealth Games 2010 , accessed September 10, 2013, http://saiindia.gov.in/english/home/Our_
Products/Other_Reports/Study_Reports/commonwealth.pdf.
Comptroller and Auditor General of India, Report No. 6 of 201 1-12 for the Period Ended March 201 1
- Performance Audit of XlXth Commonwealth Games 2010 , accessed September 10, 2013, http://
saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/union_audit/recent_re-
ports/union_performance/2011_2012/Civil_%20Performance_Audits/Report_No_6_CWG/Report_
no_6_CWG.html.
804 Ronojoy Sen
several billion rupees. Both the scale and the quantification of the corruption made it an
irresistible story for the media. Unlike an earlier period when newspapers dominated, the
Indian media landscape is much more varied, with some 150-odd television channels
dedicated to covering news both in English and Indian languages, and a vibrant social
media. Unsurprisingly, the media is ready - often going to absurd lengths - to run with
a controversial story. This made it easier for the opposition and civil society to put the
government on the mat. Two days before he stepped down as auditor general in May
2013, Rai admitted in an interview that one of the factors that had worked in his favor
was the "media, the 24x7 channels."9
Second, the audit reports were released at a time when the issue of corruption was a
talking point in India for various reasons. During the run-up to the Commonwealth
Games, the public perception, fueled by media reports, was that the preparation for
the Games was riddled with graft. However, it was the activist and self-professed Gand-
hian from the western Indian state of Maharashtra, Anna Hazare, and his followers who
ensured that corruption would figure as one of the top issues on the government's
agenda. In April 2011, Hazare hit the national headlines when he went on a hunger
strike in central Delhi, demanding a Lokpal or a strong anti-corruption ombudsman.10
A few months later in August, Hazare again went on a thirteen-day hunger strike in
Delhi to protest government inaction on the Lokpal legislation. Hazares agitation
drew considerable support across India and was widely covered by the Indian and inter-
national media. The audit reports, particularly the one on the 2G spectrum, were high-
lighted by Hazare and his supporters and helped fuel the anti-corruption movement.
Third, in its reports on telecom and coal, the auditor general went beyond merely
auditing and into the realm of policy advice. Explicit in the audit reports was a prescrip-
tion that auctions were the best way to allot scarce resources. For the spectrum, by the
time the report was published in 2010, auctions had already been adopted by the govern-
ment. However, for coal, the CAG in its report recommended that, in order to bring
"objectivity" and "transparency' in the allocation of coal fields, the coal ministry should
"urgently work out the modalities to implement the procedure of allocation of coal
blocks for captive mining through competitive bidding."11 The new thrust of the
auditor general was articulated by Rai in his talk at Harvard where he said that his
office was "as much engaged in the business of upgrading governance as any other
agency in the administration."12 Political analyst Pratap Bhanu Mehta has pointed out
that, despite possible mistakes in the auditor general's calculations, the recent audit
9Pradeep Thakur, "Our Capacity to Put Up with Corruption Was Going beyond Bounds. Now the
Line Has Been Drawn," The Times of India , May 20, 2013.
10Mitu Sengupta, "Anna Hazare and the Gandhian Ideal " Journal of Asian Studies 71, no. 3 (2012):
593-601.
Comptroller and Auditor General of India, Report No. 7 of 2012-13 for the Period Ended March
2012 - Performance Audit of Allocation of Coal Blocks and Augmentation of Coal Production (Min-
istry of Coal), accessed September 10, 2013, http://saiindia.gov.in/english/home/Our_Products/
Audit_Report/Government_Wise/union_audit/recent_reports/union_performance/2012_2013/
Commercial/Report_No_7/Report_No__7.html.
NDTV, "Govt Auditor (CAG) Vinod Rais Speech at Harvard Kennedy School," accessed Septem-
ber 10, 2013, http://www.ndtv.com/article/india/govt-auditor-cag-vinod-rai-s-speech-at-harvard-
kennedy-school-327674.
reports shifted the "focus of accountability from merely expenditure to a framework of

justifications." He has argued that the reports pushed forward the idea that government
policies must meet the "test of public reason."13 Whether this is within the constitutional
remit of the auditor general s office is open to interpretation, but that it, like the Supreme
Court, is able to do so is because the reputation of India s elected representatives and
Parliament has reached an all-time low. Recent surveys, as well as agitations like the
one led by Hazare, are testimony to the deep disenchantment with the political class.
This has allowed the Court and now the auditor general not only to enter into areas
that would normally have been in the legislative and executive domain, but also to win
praise from the ever-expanding Indian middle class.
The Impact of the Reports
The effect of the reports has by any standards been spectacular and none more so
than the one on 2G spectrum allocation. Following the 2G report, the telecom minister,
Andhimuthu Raja (a lower-caste member of Parliament from Tamil Nadus Dravida
Munnetra Kazagham, at the time a constituent party of the federal governing coalition),
under whose watch the spectrum allocation was made in 2008, resigned in November
2010. Subsequently the issue was taken to court, resulting in the arrest and several
months in judicial custody for Raja as well as a former telecom secretary before Raja
was released on bail in May 2012. Raja and fifteen others were expected to be tried
in 2013. The opposition parties, led by the Bharatiya Janata Party (BJP), took up the
issue in earnest and derailed an entire session of Parliament in the winter of 2010,
demanding a joint parliamentary probe into the scam. The demand was eventually con-
ceded, making it only the fourth time that such a request was granted. Finally, the
Supreme Court in February 2012 struck down the allotment of 122 telecom licenses
and ruled that natural resources should be sold to private players only through
auction. (This was later revised in September 2012 by a Constitution Bench of the
Supreme Court, which said that auction, despite being "preferable" for allotment of
natural resources, was not a constitutional requirement. The Court did not, however,
revisit its decision on the 2G spectrum.) Besides the catastrophic impact of the
auditor general s report on the government, it had another unexpected spin-off. It pro-
vided fodder for the most serious anti-corruption movement in India in recent times,
led by Hazare from 2011 onwards.
The two reports on the Commonwealth Games indirectly resulted in the rolling of
heads, most notably of influential Congress MP and chairman of the Games organizing
committee, Suresh Kalmadi. Kalmadi and several of his aides were arrested in April
2011 and remained in custody until January 2012. The latest in the series of explosive
reports questioned the methods of allocating coal fields, many of them to private compa-
nies, between 2004 and 2009. It caused a furor, and even as the government was conduct-
ing a review of the allocations, the Indian Parliament was nearly brought to a standstill in
2012 amid calls for the resignation of Prime Minister Manmohan Singh, who had held the
coal portfolio during the period when the coal fields were allotted.
13Pratap Bhanu Mehta, "Great Cleansing Act," The Indian Express , August 20, 2012.
806 Ronojoy Sen
The Institution
Much of the power of the auditor general stems from its position as an independent,
constitutional authority. It was originally designated as the Accountant General to the
Government of India, and two critical features of the institution, as stipulated in the
1935 Government of India Act, were retained in independent India: the accountant
general could be removed from office "in like manner and on like grounds as a judge
of the Federal Court," and on vacating office he or she was barred from holding any
office under the Crown in India. Articles 148, 149, 150, and 151 of the Indian Consti-
tution, which define the structure of the auditor general in independent India, have
similar provisions to ensure his or her autonomy. Interestingly, the Constitution inserted
"comptroller" before "auditor general," giving the post a weighty, but also archaic, ring to
it. Indeed, as far back as 1916, the New York Times in an editorial railed against the word
"comptroller," which it felt should rightly be "controller," still in use in the United States
and the United Kingdom, and called for it to be banished.14
Article 148(1) of the Indian Constitution states that the auditor general "shall only be
removed from office in like manner and on the like grounds as a Judge of the Supreme
Court." Article 148(4) says that the auditor general shall not be eligible for further office
in the government "after he has ceased to hold his office." In addition, Article 151 stipu-
lates that the audit reports relating to federal accounts must be laid before both Houses
of Parliament and the reports relating to accounts of states before state legislatures. The
importance attached to the institution was apparent during the Constituent Assembly
debates. Ambedkar was, however, unhappy with the fact that the staff of the auditor gen-
eral s office were to be appointed by the executive - the very institution it was expected to
audit - which he termed an "incongruity/'15 What independent India ended up with was
an auditor general that was "neither legislative nor purely executive,"16 but an indepen-
dent federal authority that served both branches of government. Since the appointment
of the auditor general has, however, been the prerogative of the executive, the quality of
the incumbent has varied. The first four audit chiefs were from the Indian Audit and
Account Service; the last seven incumbents from 1978 onward, including Rai, who
held the position from 2008 to 2013, have been from the Indian Administrative
Service with no particular expertise in auditing. This has raised questions about
whether the right person is being appointed to the auditor generals post and given
rise to demands to change the selection procedure.
The situation is quite different with the supreme audit institutions of other countries.
In the United Kingdom, until 1983 the auditor general reported to Parliament, but was
under the administrative authority of the executive. Under the National Audit Act of
1983, the auditor general formally became an officer of the House of Commons.
Some Commonwealth countries, such as Australia and New Zealand, follow the
amended British model. Many Asian countries, including Japan, South Korea, and
14Raghu Karnad, "The Gloves Are Off," The Caravan , September 1, 2011.
Constitution Assembly of India, Volume VIII, Constituent Assembly Debates , accessed Septem-
ber 10, 2013, http://parliamentofindia.nic.in/ls/debates/vol8plla.htm.
16R. K. Chandrasekharan, The Comptroller and Auditor General of India : An Analytical History
1947-89 (New Delhi: Ashish Publishing House, 1990), 1:52.
Thailand, follow a similar system where the legislature ratifies the appointment of the
head of the supreme audit institution. In the United States, the Government Account-
ability Office has always worked for the U.S. Congress, and the comptroller general is
chosen from a list provided by the Congress.
In India, it took two decades from the formal ratification of the Constitution in 1950
to codify the precise role of the auditor general under the Comptroller and Auditor-
General (Duties, Powers and Conditions of Service) Act, 1971. The Act clearly spelled
out the authority of the auditor general s office to audit all receipts and expenditures
of the federal and state governments, giving the auditor general the power to inspect
the accounts of any government office or agency as well as making it compulsory for gov-
ernment agencies to provide any information required of them.
To carry out its wide-ranging mandate, the auditor general s office has always had a
fairly substantial staff strength. In 1948, the Indian Audit and Accounts Department, the
organization that the auditor general heads, had 15,600 staff members.17 By 1990, this
had increased to 60,532. 18 However, the numbers have steadily declined since, primarily
due to increasing computerization, with the auditor general s office having a current staff
strength of nearly 46,000 spread over 136 offices and an annual budget of Rs 28.04 billion
(US$443.6 million) for 2013-14. 19 Even taking into account the size of Indias govern-
ment, these are significant numbers. By way of contrast, the U.K. National Audit
Office employed 860 people20 at a net cost of 67.8 million pounds (US$108.5 million)
for 2011-1221 and the U.S. Government Accountability Office employed 2,957 people
in eleven offices with a budget of US$533.6 million for the 2012 fiscal year.22
The Record
Given its remit and its autonomy, the auditor general s office has, however, not played
as significant a role as one would have expected. One of the reasons is that it has no legal
powers to act against government officials or departments that have violated rules. It can
only point out the violations, after which it is the responsibility of the government to table
the reports for which there are no deadlines. Indeed, a consultation paper by the National
Commission to Review the Working of the Constitution recommended in 2011 that the
CAG be given "quasi-judicial" functions along the lines of those enjoyed by audit
17 Ibid., Lxxiii.
18Vijay Kumar, The Comptroller and Auditor General of India: A Thematic History 1990-2007
(New Delhi: APH Publishing, 2008), 45.
Comptroller and Auditor General of India, "Allocation under Grant No. 41 of the Union Budget
- IA&AD for the Year 2013-14/' accessed September 10, 2013, http://saiindia.gov.in/english/home/
about_us/Budget/CAG_budget_info.pdf.
National Audit Office, "About Us," accessed September 10, 2013, http://www.nao.org.uk/
about-us/.
21National Audit Office, National Audit Office Annual Report and Accounts 2012-13 , accessed Sep-
tember 10, 2013, http://www.nao.org. uk/wp-œntent/uploads/2013/05/ANNUAL-REPORT-2013_
WEB-l.pdf.
22U.S. Government Accountability Office, "GAO at a Glance," accessed September 10, 2013,
http://www.gao.gov/about/gglance.html.
808 Ronojoy Sen
institutions in countries like Japan, France, and South Korea.23 Besides, the two parlia-
mentary financial committees designated to examine audit reports - the Public Accounts
Committee and the Committee on Public Undertakings - have rarely looked at the
reports in any detail, let alone acted on them. In 2010-11, for instance, the two parlia-
mentary committees discussed only twenty-nine paragraphs from the forty-two audit
reports on the federal government prepared during this period. The numbers have not
been much better in previous years.
Prior to the recent reports, though, there have been a few instances in the past where
audit reports have had an impact. One was the audit report in 1989 on the now-infamous
Bofors scam, revolving around the procurement of arms from a Swedish firm, which
shook the Congress government headed by Prime Minister Rajiv Gandhi.24 At the
time, the opposition resigned en masse following the tabling of the report in Parliament.
Another report that had a significant impact was an audit of the Bihar government in
1995-96, which found that the states animal husbandry department was spending
much more than its sanctioned budget. Between 1993 and 1996, in six districts, the
department drew around Rs 2.79 billion (US$81.8 million) from the state treasury
against an approved sum of Rs 105 million (US$3 million).25 The then chief minister
of Bihar, Lalu Yadav, along with a host of high functionaries, was implicated in what
was termed the "fodder scam" by the media. Considering the nature of the charges
and the people involved, India s federal crime investigator, the Central Bureau of Inves-
tigation, took over investigations in 1996 and filed a chargesheet against Yadav and
fifty-five others in 1997. The same year, Yadav resigned as chief minister (installing his
wife Rabri Devi in the chief ministers chair) and was also held in judicial custody.
Since then the investigative and judicial process has dragged on, with Yadav being
remanded on several occasions. Even as a special court continues to hear this case,
sixteen years after the charges were first framed, Yadav continues to be a prominent pol-
itical figure.
Yet another audit report that had a considerable impact was on the procurement of
items during the 1999 Kargil war with Pakistan, officially known as Operation Vijay.26 The
report, presented to Parliament in 2001, found several faults with the procurement
system of the defense forces. One of the findings was that a sizeable amount of supplies
was received after the war had ended, with supplies worth Rs 17.62 billion (US$378.1
million) being shipped six months after the cessation of hostilities. It also found that
equipment and supplies worth Rs 2.61 billion (US$55.8 million) did not meet quality
standards. The report caused an uproar in Parliament and was covered extensively by
the media, which focused particularly on the emotive issue of irregularities in the contract
for procuring coffins and body bags for soldiers. Following the audit, defense procure-
ment procedures were revamped and some of the guilty officers punished. There are
many, however, who are yet to face trial. The lack of action on the report prompted
^National Commission to Review the Working of the Constitution, A Consultation Paper on Effi-
cacy of Public Audit System in India: Cò-AG - Reforming the Institution , accessed September 10,
2013, http://lawmin.nic.in/ncrwc/fìnalreport/v2bl-l 1 .htm.
The Times of India , July 20, 1989.
^Kumar, op. cit. note 18, 886.
26Ibid., 863.
the Supreme Court to observe on a public interest litigation on the Kargil purchases, a
decade after the CAG report was published, "Most of the time, CAG reports are not
given their due. The [defense] department attaches no value to the institution but the
Constitution gives the CAG a position of primacy."27
A Third Force?
While the auditor general s accounting and prescriptions have been used to beat the
government, they have not gone uncontested either. The government, led by Kapil Sibal,
a high-profile lawyer who was appointed the telecom minister after Raja resigned, has
consistently argued that the 2G spectrum report was flawed. If the governments
defense on spectrum had few takers, including in the Supreme Court, the report on
coal allocation has been much more widely questioned. One of the criticisms was that
the auditor general erred in calculating the loss based on 2010-11 prices, though the allo-
cations were made in 2006, resulting in considerable inflation in the loss figure. Yet
another criticism was that the report failed to discount future profits.
There are admittedly problems in the methodology of calculating presumptive
losses. This is under scrutiny not just by experts and the media but also by the Public
Accounts Committee of Parliament. However, the greater good done by the audit
reports has outweighed their faults. The interventions have come at a time when corrup-
tion has been at the top of the national agenda. Arguably Rai and his team have been
prime movers in pushing corruption into public focus. Without their reports,
anti-corruption agitations like the one led by Hazare might not have taken off in the
way they did. At the same time, without civil society groups stridently taking up
the issues raised by the auditor general s office, their reports would not have got the
mileage that they did. The auditor generals prominence could be seen as a third
coming for Indias institutions after the Supreme Court, which laid claim to being the
final authority on constitutional matters in the 1970s, and the Election Commission,
which, beginning with chief election commissioner T. N. Seshans tenure in the 1990s,
started wielding its authority much more effectively than before. Both the Court and
the election panel possess enormous powers and far greater legitimacy in the eyes of
the people when compared to elected representatives. A prominent retired bureaucrat
has recently suggested that under the Indian Constitution there are five organs of
state.28 In addition to the executive, legislature, and judiciary he adds the Election Com-
mission and the auditor general. This is in line with Bruce Ackerman s argument for a
model of "constrained parliamentarianism," where a host of "special-purpose branches"
check and balance the elected house, over American-style separation of powers.29 In
India, however, the auditor generals office, despite its occasional interventions, has
never really been in the same league as the Supreme Court or the Election Commission.
In the words of a legal scholar, it is "independent but inferior."30 This is partly because,
2 'The Indian Express , February 10, 2011.

28Ramaswamy Iyer, "Role of CAG," Letters, Economic ò- Political Weekly , October 6, 2010.
Bruce Ackerman, "The New Separation of Powers," Harvard Law Review 113 no. 3 (2000), 727.
Madhav Khosla, The Indian Constitution (New Delhi: Oxford University Press, 2012), 40.
810 Ronojoy Sen
unlike the Court or the election panel, the auditor general does not have the same kind of
legal powers to enforce. It can only audit and prepare reports, which must be placed
before Parliament and eventually appear in the public domain.
The Indian media has portrayed Rai as doing a "Seshan" by not only giving more
teeth to a moribund organization, but also having grown bigger than the outfit he
headed. The government insinuated that Rai was following in the footsteps of a predeces-
sor, T. N. Chaturvedi (1984-90), who, after retiring as auditor general, contested elec-
tions on a BJP ticket and was elected to Parliament. What is undeniable, however, is
that the person occupying the auditor generals chair is critical to the profile of the
audit body. If, as Rai himself pointed out, he had not held press conferences on some
of the more explosive reports, they might have gathered dust.31 Indeed, there were mis-
givings that the government might choose someone "bland and ignorable"32 to be the
next audit chief after Rais retirement on May 22, 2013. This was accompanied by calls
for the selection to be made by a broad-based selection committee to replace the
current procedure, where some names are suggested from within the government to
the prime minister, who then recommends a name to the president of India. It is the pre-
sident who formally appoints the auditor general.33 Some of the misgivings about the
direction of the auditor general s office following the departure of Rai have not been
unfounded, with the agency maintaining a relatively lower profile under the new
auditor general, former defense secretary Shashi Kant Sharma.
Though the recent audit reports provided momentum to anti-corruption protesters
like Hazare and his followers, they also illustrated the need to question the ultimate
objective of the protests - an all-powerful, anti-corruption ombudsman. The impact of
the reports seems to suggest that if the various government agencies and constitutional
authorities, which are meant to ensure accountability, do their job there is no need for
yet another Leviathan-like Lokpal.34 The reports, which have resulted in high function-
aries being put on trial, are a reminder that there are institutions and mechanisms within
government that can identify wrongdoing and set in motion a process to punish those
responsible for it. The auditor general is one among several institutions, which include
the Central Bureau of Investigation and the Central Vigilance Commission, to identify
and tackle corruption. The real difference, however, between the other anti-corruption
agencies and the auditor general s office is that the latter is a constitutional authority
and relatively less prone to government pressure. In fact, Rai has made the point that
both the Central Bureau of Investigation and the Central Vigilance Commission are
"handmaids" of the government and for them to be really effective they need be made
constitutional bodies.35
At the same time, we must guard against the rhetoric that the auditor generals
reports are part of a "great cleansing act" in India.36 The scale of corruption - inflated
or otherwise - unearthed by the auditor general in its recent reports is very much
31Thakur, op. cit. note 9.

32Ramaswamy R. Iyer, "Selecting the Next CAG," The Hindu , February 21, 2013.
Baijayant Panda, "Empowering a New CAG," The Times of India , April 11, 2013.
Sengupta, op. cit. note 10, 596.
The Hindu , November 8, 2012.
Mehta, op. cit. note 13.
about graft in high places, done by high functionaries in government. It says little about
the endemic, daily corruption - what James Scott calls "retail corruption"37 - that bede-
vils India and hurts the middle class and the poor the most. Indeed, the audit reports and
their reception might have had the perverse effect of further inuring people to petty cor-
ruption that does not measure up to the grand scale of a telecom or a coal scam. That is of
course not the fault of the auditor general, but it does point to the limits of the auditor
general s office as an institution to tackle corruption.
37James C. Scott, Comparative Political Corruption (Englewood Cliffs, NJ: Prentice-Hall, 1972), 25.
The Journal of Asian Studies Vol. 72, No. 4 (November) 2013: 1035.
© The Association for Asian Studies, Inc., 2013 doi: 10. 1017/S002191 1813001782
ADDENDUM
Going Beyond Mere Accounting: The Changing R

of India's Auditor General - ADDENDUM
doi: 10. 1017/S002191 1813001642. Published by Cambridge University Press, 30 Septem-

ber 2013.
After this piece went to press, it came to be that seventeen years after the charges were
first framed in 1996, a special court on September 30, 2013 sentenced former Bihar chief
minister Lalu Yadav to five years in prison for his role in the fodder scam. Following his
conviction, Yadav has also been disqualified from the Lok Sabha or the Lower House of
Parliament. Yadav has since appealed against the verdict in a higher court.
Reference
Sen, Ronojoy. 2013. Going Beyond Mere Accounting: The Changing Role of Indias
Auditor General. Journal of Asian Studies 72(4).

Changing Role of Indian Auditor General

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Changing Role of Indian Auditor General

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Going Beyond Mere Accounting: The Changing Role of India's Auditor General

Author(s): RONOJOY SEN

Going Beyond Mere Accounting: The Changing Role

Why the Fuss Now

reports shifted the "focus of accountability from merely expenditure to a framework of

The Impact of the Reports

2 'The Indian Express , February 10, 2011.

31Thakur, op. cit. note 9.

Going Beyond Mere Accounting: The Changing R

doi: 10. 1017/S002191 1813001642. Published by Cambridge University Press, 30 Septem-

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