CAG and the pursuit of mediocrity
A vital check on corruption and government spending,the CAG must look beyond numbers and assess intangibles
A vital check on corruption and government spending,the CAG must look beyond numbers and assess intangibles
During the 30 May 1949 Constituent Assembly debates,Dr B R Ambedkar described the CAG as probably the most important officer in the Constitution of India with duties far more important than the duties even of the judiciary,one who should have far greater independence than the judiciary itself.That is a remarkably strong statement and underscores the unique position of the CAG.It is a constitutional post,and the holder of that office can only be removed in the same manner and for the same reasons as a judge of the Supreme Court.
The amplitude of this remit,and the thinking behind it,should have informed the working of the CAG which should have served two purposes to control corruption and prevent wasteful government expenditure and also foster excellence in the public sector.Tragically,it has done neither.Corruption is more widespread now than ever before;and,in the public sector,the persistent and often hair-splitting approach of government audit has spawned a culture of mindless mediocrity.
The starting assumption has,for the longest time,been that cheapest is best.The lowest tender is the one chosen.Decisions are often faulted because had they not been taken,a financially more fruitful result might possibly have resulted.It seems not to matter that that result is uncertain and might never in fact yield any such result;an audit observation does enough damage.
The direct consequence is in commercial matters,no government or government agency is ever willing to take a rational decision;and second,that in awarding contracts,the lowest bidder (known as L1) always succeeds.That is why law departments of every government agency routinely file useless appeals and applications.No law officer or department head wants to be asked to explain why he decided not to appeal (after all,who knows what a court will finally decide).That a vast amount of public money is wasted on these useless matters is never taken into reckoning–and there is a very real,though perhaps not immediately obvious,cost to taking up a courts time.
Or take road building projects.One reason so many of our roads are so terrible is that the best contractor just does not get the job.Typically,a bidder for a road construction contract will quote absurdly low.This bidder may have no more than the minimum technical skill,but is incapable of anything innovative.Once he gets the award,he then starts demanding escalation and additional remuneration.In the end,the government ends up paying significantly more for an inferior product.Government audit looks only at the known expenses;it does not evaluate or quantify innovation,longevity of the final product or even intrinsic value of excellence itself.The audit becomes an attempt to unscramble the past instead of planning for the future.
The National Highway Authority of India has for some years been engaged in a highway-building project unprecedented in our history,that vast network of highways and expressways called the Golden Quadrilateral.The projects impact is profound;more than any other single project,this will change the way the country works.The CAG has routinely found fault with the NHAI.In May 2005,the CAG castigated the NHAI for not having standardised lengths,crosssections and bills of quantities for items such as bitumen.NHAIs response,that such a standardisation was impossible given the varying climatic conditions and terrain of different segments,seemed not to matter.In 2008,the NHAI was again hauled up for not having standardised Detailed Project Reports.Experts disagreed,pointing out that this kind of homogenisation only helps accountants and gives no room for innovative road engineering.
There are only a handful of government projects post-Independence that are truly outstanding.The Delhi Metro is one;and,despite the CAGs carping,the NHAI has been able to produce some roads that are world class.But these are exceptions.For the most part,fear of audit forces a march to ever greater mediocrity.
In a truly piquant turn of events,in July 2010,the CAG considered dropping tenders for the appointment of government agencies internal auditors.The Institute of Chartered Accountants of India complained that many auditors quoted unrealistically low fees and possibly colluded with the agency.The ICAI felt that the acceptance of lowest tender is not desirable in all cases,as there could be compromise on quality.
The ICAI is right,but its view in not limited to audit.Of course,we need the CAG;it is an important check on corruption and government spending.But we need a CAG that will look beyond numbers and intelligently evaluate intangibles: better roads;innovative engineering;cautious litigation.
But there is hope.If the August 2010 CAG guidelines on environmental audit are anything to go by,we might yet see an auditing system both sensible and imaginative.
* Post Independence,a few government projects,like Delhi Metro,are outstanding – GAUTAM PATEL