Not hard to be honest to function in bureaucracy: Ex-CAG

He maintained it is not difficult to be honest and yet function effectively in the bureaucracy

Below is the edited transcript of Vinod Rai interview on CNBC-TV 18

Q: When you were in the finance ministry and in the Kerala cadre. We have not heard your name several times for daring the government. When you took this position as auditor what were your first thoughts? Did you want to bring a different look and a different feel to the position of the auditor?

A: Not really. I am a plain simple Mr Rai, not PhD as yet. I have got a lot of time to study and I might do that going forward.It is not a question of daring the government. Every job has a certain mandate attached to it. When you get into the job you know you have a whole departmental support, professional support for the department.

I must compliment the Indian audit and accounts department as one of the most professional departments. Their caliber, their professional knowledge and they are totally apolitical in every sense of the word.What happen is when they do audits they look into lots of books, they look into lots of issues, they look into lots of projects etc. The amount of material that they throw at your desk, there is no way in which one could either ignore that material or not put it out into public domain.So, we all thought it would be very unfair on our part not to let the public know what this was all about.

Q: Several other auditors have preceded you. We have never seen so much of action from the CAG. What was different in your tenure, is it that corruption had reached a high in the five years when you were in charge or is it that you looked at things differently?

A: I don’t think it is corruption really. However, if you see, most of these events had taken place before I was appointed as the CAG. More importantly two things have happened in the recent past, one is, I must complement the role of the media. It has been a very positive, a very constructive kind of a role.

Now that we have 24X7 media they are watching over the shoulders as just about anybody and ensuring that the man who sits on the desk feels as if he is sitting in a glass cabin and his actions are totally transparent, are totally accountable.

Number two, the citizen today has become very aware. Just about any issue that comes up, he has started questioning the actions of the government which I think is a very healthy development. These were the two factors which kind of assisted us and we had no option but to put out the things that came to our notice and in large number of ways this will help cleanse governance. It will help put government systems into place which will be able to stand the test of scrutiny.

Q: From what you are saying this should be a permanent high that the CAG has reached in our public life because 24x7 media is only getting stronger and more numerous in terms of the number of channels, civil rights activists and active citizenry are if anything getting stronger by the day. Do you think the CAG has permanently changed its position in the Indian public space?

A: I don’t think you could call it a permanent high as such, but yes institutions today have begun to assert themselves because the public wants the institutions to assert themselves and more important the people who go into those institutions largely lead them or head them believe that they have a role to perform. It is actually that role which is mandated for that institution which going forward henceforth will necessarily be performed by those institutions and the people who head them.

Q: Nevertheless I still want to belabor the point about your career till you were in the finance ministry and then when you became an auditor. What was the mental change that you felt yourself as civil servant in the finance ministry and then as auditor?

A: Let me explain this to you. There is no mental change involved. But you must understand we function, civil servants function in a parliamentary democracy. In parliamentary democracy the man ultimately accountable to the public is the minister. Public elects the Member of Parliament. Then government is formed and then a minister is appointed and he is the one accountable to the public or the Parliament.

Now, when you sit as a secretary to department you may have any views, you may write whatever you like to write on the file but the ultimate decision that counts is that of the minister. The minister, if he overrules you – that is it. His view counts and that is the supreme authority in any department.

So, whatever I may have done as a secretary maybe in government of Kerala where I was there or in government of India, my writ ended only as that of a secretary. Ultimately it was the minister whose viewpoint counted and that is it, that is what happens in a parliamentary democracy.

Q: So, what you are saying is that the buck stopped not with you but with the minister. A: When you become a constitutional authority like a CAG or the CVC or the election commissioner then the buck stops on your desk and you call the shots. So, that was the major difference according to you?

A: That’s right.

Q: Nevertheless let me ponder a little more over civil servants and the aura or the ambiance in which they operate? Is it very difficult to be very scrupulously honest? Is it that there are too many cards that the government holds and therefore you may have to probably end up being transferred too often or be relegated to lower positions if you were a very vocal civil servant or if you stood your ground against the minister?

A: I don’t think it is difficult to be honest and yet function effectively in the bureaucracy. There are a large number of us who have stood our ground, who have done what the government has asked us to do, done it in a very transparent and objective fashion, been able to stand up to our concisions also and yet in a large number of ways been able to deliver on behalf of the government.

So, the fact that politicians tie me or the bureaucrats, or the bureaucrats finding it very difficult, or the atmosphere is stifling, I think is a bit of a bogey. Quite often there can be difficult bosses, the bosses can have a difficult secretary also but it is not very difficult to strike a wavelength with the minister and it is not very difficult to persuade ministers to get around to your viewpoint also.

A minister always is more political than a secretary would be, he has a political role to perform and we don’t blame him for playing that role which will be more leaning towards what the public wants or what the political party wants but I think it is very easy. It is not very difficult to marry the two objectives and take it along together.

Q: What is your own assessment of the civil service force? Would you say the services are 90 percent honest, 80 percent honest or much less?

A: It is very difficult for me to put a figure on it. I must say that civil services are by and large honest. You may find some people in the grey area and those people who are in grey area are the ones that ultimately will become the black sheep. They become the black sheep for the civil services and they become the black sheep for the politicians also because they are the ones who lead you onto the wrong side.

It is easy for them to be led to the wrong side but they are in a terrible minority and I think by and large the civil services are not only honest but they are very loyal and faithful to the constitution.

Q: Now for the tougher questions or the critical editorials. There were not so many editorials written, I have heard this comment more off camera or off the record that some of the decisions you took have clearly stymied the Indian economies, stymied the telecom sector in particular with development being pushed back by several months maybe even years. How do you react to that criticism?

A: There are always two sides to a coin. I will obviously always support the decision that we took or the reports that we brought out. There is always a flip side to it and that is a flip side that you are talking about but I don’t think very many people will believe that what happened should have gone unnoticed and that we should have all believed as if nothing wrong has happened and that is a part of government and that is a part of government’s functioning and that is a way business is done in India because like it or not much before our reports came out, the buzz all over the global economic scene was this is the way you have to do business in India if you have to be there.

Hence, even in this particular case that you talked about, at the least two-three global companies known to us were persuaded to join hands and do business the way their Indian partners wanted to do business which I think was not the right thing and certainly not the right way Indian economy is projected.

Q: Clearly no one disputes the fact that these the wrong decisions or the wrong manner of taking decisions had to be brought out changing last dates, taking decisions in a manner that led to huge loss to the exchequer is clearly something which had to be brought about. The criticism about the number you brought out. 1,75,000 crore in terms of potential loss to the exchequer and you said was a conservative figure. On hindsight do you feel that that was a market related figure? At that time we were a 9 percent economy and it looked like we would be 9 percent for the next decade, now we are a 4 percent or a 4.5 percent economy and it looks like we are going to be 4.5 percent for three-four years. So was that 1,75,000 a market number and another day, another age that 1,75,000 would not have stood the test of the market, do you regret that figure?

A: You have answered the question. I don’t regret that figure at all because markets are dynamic, prices are dynamic, prices are dictated by supply and demand phenomenon at that point of time. So a figure of 176 which held true in 2010 may not hold true into 2014. But the figure of 2001, which was taken for sale in 2008 wasn’t correct either and which was being told to that particular department by no less a person than the Prime Minister or the Finance Minster themselves.

So the sum total of it all is figures hold true depending upon the situation as it persists at a point of time. Maybe three years down the line, 176 will appear to be very small.

Q: What about that being a part of policy, for instance the manner in which coal blocks were allocated, may have been wrong but the fact that they were allocated for free was because India needs electricity or the argument that in several countries spectrum is given free because the idea is the nation will get more into its exchequer if the raw material is free because business to business transactions will increase. Do you believe that there is something to that as well?

A: 100 percent. What you say is totally right. Number one spectrum being given free I don’t think there are many countries because larger countries like Canada, UK, Australia they have all being auctioned but it is very surprising, it is not very well known but in the UK when the auction took place the government managed to get resources one and half times what they had thought they would be getting.

So an audit was conducted to find out why we had got too much. But that aside it is not a question of talking about policy, the density of telephony, density of ensuring that telephony gets to inaccessible areas also was a very good objective of the government. What you have to do is and that is what the Planning Commission was saying not us that you have to balance the revenue generation on one side and the social objective on the other side. We have never talked of revenue maximisation, we talked of revenue generation which means you have to strike a balance.

You don’t have to give it free because after all these are national resources, you give them out once, they are gone forever. On the other, as regards the coal, the objective for which captive mine block was to be allocated was absolutely kosher we have no doubt. The idea was power to all by 2012 and you had to provide fuel linkage to those power companies who are established power companies. All that we said was you took a decision in 2004 to auction, fair enough, you could have easily taken executive decision to do auctioning as much as you took to set up a screening committee. Anyway that decision was getting delayed.

In 2005, you took a decision that okay let us continue to allocate as per the earlier screening committee norms. Now it has come out in public domain that out of 57 of those mines allocated, 56 even the first paid has not been dug which means your objectives have not been achieved, you should have taken a decision long time back to scrap it and make it available to somebody else who probably was a better person to exploit that mine than to whom you had allotted.

Q: The other criticism again which came entirely off the record and actually from some of your own force on your peers was that you started the practice of putting out the reports on the website. Whereas their argument was this was the property of the Public Accounts Committee (PAC) which will take onboard the answers of those whom you found short on decisions and then the whole thing is made public. You made the reports public before the other side got a chance to defend themselves before the PAC. What do you have to say to that?

A: It is very unfortunate because people who have made those comments really haven’t seen what the policies are about. In 1988 the first media policy of the CAG was enunciated. My own feeling was that was after the Bofors scandal where lot of misinformation was going out.

Then the PAC, the government and the CAG sat together and thought that misinformation should be curbed and right information should be given out to public. That was the time when this tripartite meeting said that once a report is tabled in parliament it comes into public domain. That day the CAG or his officers must hold a press conference and explain what the report is all about. This is for parliament in Delhi, for the state capitals it is done by the accounting general concerned. This issue continued but in 2004 it was challenged by the then AIADMK government in the high court.

The HC has given a verdict on this. The HC has in fact reprimanded that person who took it up and said the reports must be explained and they are being explained only after they are being tabled in house. Which means they are already in public domain. So, we are not revealing to the public something which should not be in the public domain.

We continue to follow the same practice which is being followed from 1988, which means once a report is tabled a press conference in the evening to explain the report and that’s all.

Q: On privilege of the executive – that is where more criticism has come and there was even I think a judicial comment that policy making is privilege of the executive and the CAG went to the extent of questioning policy making itself? Do you at any point feel that may be even though you only put out a number and that led to questioning the policy making itself?

A: We have never got into policy domain. I believe and our reports say so in as many words that policy making is the sole prerogative of the government. The auditor or the courts don’t get into it. All that we did was, we said you had a policy of first come first serve in 2008. The government itself decided to change the policy and in 2010 went in for auctions. On May 31 2010 auctions had been completed for 3G.

Our report came out only on November 16 2010. So, we were not dictating policy, the policy had changed. All that we said was and that is part of the auditor's guidelines that don’t question policy but in change of policy indicate the sub-optimality of policy. So, what we explained was in 2008 first come first serve policy got you so much revenue. 2010 the same auction got you so much. If you had compared the two you would have got so much more. That is all.