CHAPTER 3

Vinod Rai: Leading the Government Audit of Spectrum Auction

Asha Bhandarker and Pritam Singh

The Comptroller and Accountant General (CAG) of India, Vinod Rai was ruminating as he perused the 2nd generation (2G) wireless telecom technology report. He was certain that there would be a backlash once it was released and was concerned about the reaction of the government, the media, and the general public. He ruminated over the 2G audit report, placed before him by the Deputy Accountant General (Dy CAG) post and telecom; he had reviewed and verified it many times over the last few days and was still feeling bothered. The steep losses to the exchequer, owing to the high profile spectrum sale were astonishing and showed the incumbent government in a poor light as the loss figure was as high as Rs. 1,766 billion. He was wondering whether to go ahead and send the report to Parliament, knowing fully well that the reputations of many influential people in the incumbent government were at stake; or to keep quiet and maintain a low profile. He was uneasy at the thought of not saying anything. He finally went ahead and submitted the report to the Parliament as per established practice. It was then discussed in the PAC and as expected, all hell broke loose around him, with the political establishment as well as the media persons voicing strong views on both TV and in the print media.

The CAG of India

The CAG of India1 is an authority established by the ­Constitution of India; empowered to audit all expenditure from the “consolidate” fund (which includes revenues received by the government as well as expenses) of the union or state government; all revenue transferred into this account and all transactions relating to the Public Accounts, as well as the contingency funds of the union and the states. The ­Constitution of India [Article 148] provides for an independent office to the CAG of India. He or she is the head of Indian Audit and Accounts Department. He/She has a duty to uphold the Constitution of India and laws of the Parliament to safeguard the interests of the public exchequer.

The position of the CAG was created by an act of Parliament. The position is given high importance under the Indian constitution and ranks 9th in the national level hierarchy after the President of India, the Prime Minister, the Chief Justice of India, the Justices, and the Cabinet Secretary (see Appendix 1). The oath of office itself gives an indication about the preeminence of the CAG role (see Appendix 2). In fact, B. R. Ambedkar, the father of the Indian constitution told the constituent assembly that he saw the CAG as the most important officer in the constitution of India... because it is he who ensures that public money is spent as voted for in parliament (1). All told, the CAG submits 100 reports annually in the National Parliament in Delhi.2 Despite the important role played by the CAG and the Audit and Accounts Service officers, the institution has traditionally maintained a low profile away from the public eye.

According to the CAG website (2):

The executive government and not the audit (department) is responsible for enforcing economy and efficiency in the expenditure of public money. It is however the duty of audit to bring to light wastefulness, failures, systemic weaknesses, deficiencies and the circumstances leading to infructuous expenditure.

The PAC and its fourth report in the Lok Sabha (3) has observed that, “if in the course of the audit the CAG becomes aware of facts which appear to him to indicate an improper expenditure or waste of public money, it is his duty to call the attention of Parliament to them through his audit reports.”

The CAG’s Offices

Every Indian state capital has an Accountant General’s (AG’s) office that reports to the state legislature (see Appendix 3). All the AGs report to their respective states and hierarchically they report to the CAG of India (see Appendix 4).

The CAG of India oversees the Indian Audit and Accounts Department, which is manned by 500 Audit and Accounts service officers and their teams, spanning across 142 offices across India with a total strength of 44,872 employees. The Indian Audit and Accounts Department is a central government service, independent of any “executive” authority, under the CAG of India. Around 60,000 audits are conducted by the Indian Audit and Accounts Department across 2,50,000 auditable entities, notably all union and state government departments including Indian Railways, Defense, and Posts and Telecommunication; noncommercial enterprises controlled by the Union and State governments; bodies and authorities substantially financed from Union and State finances. The AG’s offices all over the country mainly churn out audit reports regarding various government schemes and send them to the CAG’s office. Under the signature of the CAG, these reports are sent to parliament and state assemblies (see Appendix 5). Out of the 100 reports submitted annually, 20 most important ones are typically taken up for discussion in ­Parliament.

At any given point in time, 3,000 audits may be taking place across the country carried out by an army of accountants working in the AGs’ offices of each Indian state as well as at the center. The AGs offices typically conduct compliance audit and financial audits, which are audits of regular transactions by the organizations or government departments under scrutiny. They are also empowered to conduct performance audits3 a move that came into being from 2002 onward (4).

Work Culture Across the A and AG’s Offices

The organization was set up in preindependence India in 1860 and is “an important vehicle to bring transparency, accountability and probity in public life” (5). The organization has been somnolent, insular, and mechanical in interpretation of rules and it has functioned in the shadows away from the public glare. Auditors—the actual field-level functionaries—diligently chased misuse of traveling allowance and dearness allowances, use of vehicles, and other such sundry activities in the government departments, which they audited. The auditing teams worked to complete their annual target of 10 reports per annum, which were then submitted to the headquarters in Delhi. Invariably 7 of the 10 reports were rejected because of substandard quality (performance focus). This problem was more acute in some states as compared to others.

Vinod Rai

Vinod Rai, a 1972 batch officer of the Kerala Cadre of Indian Administrative Service (IAS) cadre took over as the 11th CAG of India in 2008 (6). The IAS is the premier administrative service of India. IAS officers hold key and strategic positions in the Union Government, States, and public-sector undertakings (7). IAS is the permanent bureaucracy of India providing continuity and neutrality to the administration.

Vinod started his career as a trainee IAS officer in the state of Nagaland, following which he was deputed to the Kerala state cadre. His first posting was as the sub-collector of Trissur District where he subsequently became the Collector. He was given the honorific title—“the second Sakthan Thampuran” (the name of the erstwhile King of Cochin who developed Trissur town in the 19th century), for the role he played in the development of the Trissur City (8). Subsequently, he became the Managing Director of Kerala State Co-operative Marketing ­Federation from 1977 to 1980. He brought together 900 disparate spice and cashew cooperatives and built the Kerala State Cooperative Marketing ­Federation, which subsequently became the largest exporter of pepper from India. Later he was appointed Principal Secretary (Finance) in the State Government of Kerala. Prior to his appointment as CAG, he served as Secretary, Financial Services, and Additional Secretary in the Banking Division including banks and insurance companies under ­Ministry of Finance (10). He is credited with bringing in insurance reforms and framing the new pension scheme when he was in the ­Ministry of Finance.

Rai’s father was a patriot, who gave up pursuit of his PhD from ­Allahabad University, and joined the Indian army as a mere soldier—without caring about the rank—in 1944 during World War II. Rai—one of three sons—did his postgraduation from Delhi School of Economics and earned a Master’s in Public Administration from Harvard. He said, “My father has been my hero; my mother had so much faith in me that she always said, ‘my son can do no wrong.’”

Vinod Rai’s Team: New Thrust

When Vinod took over as the CAG, he felt that he was, “helicoptered” into the new role, since he came from a different cadre of officers and knew ­nothing much about auditing. There was nothing unusual in the selection process of the CAG as this was the norm over the years. It however did create a gap between the Audit and Account service officers and the incoming CAG.

Prioritization and Role Clarification Through Participation

According to one of the DGs, we met Vinod who started his tenure as CAG by calling officers for meetings in small groups. In the first month after he took charge, many such small group meetings were held, followed by larger group meetings and town-halls. Over a period of a few months, these meetings covered all 500 Indian Audit and Accounts ­Services (IA&AS) officers. The questions he raised for discussion in these meetings were initially regarding the focus of the work of the AGs’ offices. He would initiate discussions about the huge government spend on large developmental projects that were in urgent need of systematic audit. For example, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) had a budget of Rs. 30,000 crores and Sarva Shikha Abhiyaan (SSA—a movement for universal education) had Rs. 40,000 crores at its disposal. He would speak about these projects and contrast this with the negligible amounts lost in petty office-level corruption related to misuse of stationary, official transport, and conveyance allowance. One of his Deputy Accountant Generals (DAGs) said that there was greater preoccupation among the auditors of the IA and A department to catch such misuse within offices…a petty sum compared to the large value spend that Vinod described.

These internal meetings culminated in a three-day conference in July for all 104 AGs where many matters pertinent to the AG officer’s role were discussed. Among other things the group debated on questions such as, “What is our role? Should we focus on the small fish or go after the big fish?” The three-day conference ended in a cricket match where Vinod himself participated along with the others. The wives of the officers were also invited and kept engaged in activities designed for them.

The basic question regarding accountability of the CAG offices was raised in these meetings—“Who are we at the CAG offices accountable to? Is our accountability only to the government or are we also accountable to the public?” Such meetings were held over a period of six months in small and large groups over lunch and tea.

Outcome Focus

Another key issue that was discussed in these meetings was the percentage of audit reports accepted by Head Quarters—a measure of the quality of the work done by the auditors. According to a senior-level officer, the CAG made a clear statement in one of his addresses: “I am not bothered about the number of audits you conduct. I am more concerned that not a single report should be returned by Head Quarters.” Group meetings for discussions on various matters including the type of audits to conduct were quite common. A DAG said: “We would sit together in small group meetings with the CAG and discuss the relative merits of performance audit versus transactional audits.” Gradually, greater thrust was brought in to conduct performance audits—that is, whether the objectives of the concerned organization were actually being met. This was already a global practice among the Supreme Audit Institutions (SAI) of countries such as Canada, Australia, and New Zealand.

Earlier, the CAG was mainly concerned with auditing the implementation of government contracts that were awarded to various agencies, according to a former director general in the office of CAG and media adviser 2008–09 (9). He added that Rai began auditing the process leading up to the award of the contract or license even before it [the contract] had been implemented.

An important factor that emerged from the brainstorming meetings was the fact that by the time an audit report was made public, the entire issue would have already become outdated. Vinod therefore insisted on bringing down the average time period for submission of reports so that they stay relevant, said one of the officers.

Transparency

Every audit was preceded by an entry-level conference (preaudit sharing of framework) in which the department or organization being audited was invited. The audit was followed by release of the draft report and then finally an exit-level conference for exchange of views and clarifications. Groups brainstormed over a few months on their accountability to the tax payer—should not the Indian taxpayers know what is happening to the tax they pay, whether it is being rightly used? After three months of discussions and churning it was decided that wider dissemination was essential.

In an unprecedented move, the Noddy Books series (bulky audit reports converted into readable and user-friendly documents (with detailed information being made available in CDs) was launched in 2010, and made available to anyone interested to pick up a free copy from the AG’s office. In a departure from the norm social audits were introduced. Officers from the A&AGs’ offices engaged with credible citizens groups working in specific areas to avail of their local knowledge. In a landmark departure from tradition, panel discussions were held by the CAG and team, with government, political leaders, media, and other financial sector experts as well as public, to understand expectations from the audit. The entire gamut of topics were thrown up for discussion—approach to the subject, audit technologies, stakeholders’ contribution, the quality of communication, timeliness and utility of audit reports, and their overall value addition to governance. Prominent figures such as the then Chief Minister of Delhi, Sheila Dixit; Shekhar Gupta, Editor-in-Chief of the Indian Express Group; T. N. Ninan Chairman and MD, Business Standard; Deepak Parekh, Chairman HDFC; and Mohandas Pai, the then Director and Head of Infosys were invited (10). The panel discussion provided a forum for developing insight into what the stakeholders, that is, government, political leaders, media, and other financial sector experts as well as the public, expected from the audit, against what they are actually getting. Another important shift was the presentation of the positive and innovative steps taken by departments being assessed, rather than limiting the reporting only to highlighting what was missing or wrongly done.

Global Benchmarking and Training

When he started representing India at the International Organization of Supreme Audit Institutions (INTOSAI) meetings Vinod went with a team of at least four officers with specialization in different sectors. To keep up with latest global trends in auditing, strong focus was given to training in new areas—energy, social, environment (into which audits were being planned in India), in line with what global peers were doing. In fact, this thrust began soon after Vinod began to attend meetings of the INTOSAI from 2008 onward. Officers at various levels (primarily aged 35 to 40 years) were sent for training to update them on latest global trends in audit, especially new themes such as environment audit, social audit, and the like. “We had scarce resources so thrust was given where training could have maximum impact,” he said. Training was also imparted to create a core group of audit specialists in defense, health care, nuclear, space at top notch centers such as Singapore, Qatar, Switzerland, and United States abroad. In fact, probationary officers of the IA&AS were sent to United States, United Kingdom, and Singapore for basic exposure.

Global Recognition for the CAG and His Team

The CAG of India was elected chair of the Asian Association of Supreme Audit Institute (ASSOSAI) in 2010. Vinod was nominated member of the governing board of the INTOSAI. CAG was also elected as the ­Chairman of the “Panel of External Auditors of the United Nations” from 2011 to 2013 (11). In 2011 for the very first time, accountants from the CAG offices were invited to audit the International Atomic Energy ­Organization. Teams were also invited to audit the World Intellectual Property Organization again for the first time in 2012. In addition they audited accounts of the United Nations, Food and Agriculture organization, and the World Food Program (12).

Style

Commenting on his style as CAG, one of the DAGs interviewed for this case mentioned, “he never said ‘you should do this,’ always said how can ‘we’ do this?... What do you think?”

The Dilemma

Vinod said that when the 2G report landed on his desk in 2010, “we had to think a lot. In fact I checked and crosschecked with colleagues time and again since we were going to bring the matter to the public domain.” And the feeling all along was, “are we going to bite off more than we can chew?” But then I looked back at my colleagues and found that their procedures were so robust and the facts were so definite. When they had done so much hard labor, it would have been unjust to them if we were not going to bring it out in the public domain. If I had not done that, I could not have lived with my conscience. That’s when we said let’s bring it out (13).

The 2G Scam

The 2G scam involved the issue of Licenses and Allocation of 2G Spectrum. 2G is a colloquial reference to 2nd generation wireless telecom technology that transmits voice, mail, data, broadcasting, through handheld devices and hence was in high demand. The CAG sent the 2G ­spectrum audit report to the Parliament and was discussed on November 16, 2010. The report resulted in a huge controversy since it estimated that there was a steep presumptive loss of as much as Rs. 1,766 billion owing to the decisions made by A. Raja, former telecom minister of the United Progressive Alliance (UPA) government.

Background of the 2G Scam

The department of telecom (DoT) under Minister of Communication and Information Technology is the custodian of the spectrum, responsible for allocation, with authority to issue licenses to operators in the telecom sector (tele-density shot up from 3.58 in 2001 to 26.22 in 2008 (14). Till 1994, the state was the monopoly agency providing communication facilities in India. The department was slow in meeting the huge demand for connectivity. In 1994, the National Telecom Policy (NTP) was drafted and this opened the telecom sector to private participation in a phased manner. In 1999 the policy was revised. The upfront payment was an entry fee fixed on the basis of the highest bid received in the 2001 auction of licenses. In September 2003, Prime Minister Atal Bihari Vajpayee constituted a Group of Ministers (GoM) with authority to take decisions on telecom issues.

DoT continued to use the figure arrived at in 2001 (the fee for bidders was fixed on the basis of the highest bid received in 2001) for allocation of 2G spectrum in 2008. A. Raja who succeeded Maran as telecom minister, decided to continue the internally adopted principle of “first come first served” (FCFS) for spectrum allocation. He wrote to the prime minister about his intent to decide the issue himself and rejected suggestions of referring the allocation issue to the GoM (see Appendix 6 for letters from A. Raja to PM). When the PMO sent him a query about the concerns raised by others, he assured the prime minister that no laws were being violated. Raja also assured the prime minister that the department was not deviating from the existing procedure (see Appendix 7).

A press release was issued on September 25, 2007 and applications were invited for obtaining telecom license, October 1st being the last date for receiving applications. An unexpectedly large number of applications—575—were received for 22 service areas across India. This prompted the Ministry of Communication to seek the advice of the ­Ministry of Law on how to deal with the situation. The latter advised referring the matter to the empowered GOM.

Raja wrote to the prime minister: “The ministry of law, instead of examining the legal tenability of alternative procedure, suggested referring the matter to an empowered group of ministers [GoM]; the suggestion of law ministry is totally out of context (15) with the existing policy of ‘first come first served’ for processing the applications.”

In fact the ministry advanced the cutoff date for receiving applications to September 25, 2007 and on the same day a press release inviting applications appeared in the newspaper. Surprisingly, the date seemed to be known to 13 applicants, some of whom arrived on the very same day with checks worth hundreds of crores (16). In view of inadequate ­spectrum availability, in 2008 the prime minister advised the telecom minister to consider a transparent methodology of auctions wherever legally and technically feasible and to consider a revision of the entry fee, which was then benchmarked on the decade-old spectrum auction figure (2001) mentioned earlier. Raja replied that holding an auction would be “unfair, discriminatory, arbitrary and capricious” and said that he preferred his own approach. As a result of the minister’s decision to continue with the earlier policy, some companies made huge gains at the expense of other more professional and experienced companies and also resulting in huge losses to the exchequer (17).

Around 122 licenses were issued by DoT in a single day, for unified access (January 2008), at a price discovered in 2001 based on a nascent market, despite the sector witnessing manifold growth from 2001 to 2008. Audit examination in 2009 revealed that the DoT did not implement the licensing regime as approved by the cabinet. The Ministry of Finance was authorized by the cabinet decision of 2003 to participate in the discussion for efficient allocation of spectrum and price fixation but DoT did not associate the Ministry of Finance. Despite assuring the prime minister that applications would be processed on FCFS basis, applications submitted from March 2006 to September 25, 2008 were issued LOI simultaneously on January 10, 2008 and a notice was issued through a press release giving them less than an hour to collect the same. As per the FCFS policy laid down by the department, 15 days’ time was to be given to the organizations that were issued LOIs. Besides this, 85 of the 122 licenses issued in 2008 were to companies that did not satisfy the basic eligibility conditions set by the DoT and had suppressed facts, disclosed incomplete information, and submitted fictitious documents for getting UAS licenses and thereby access to spectrum (18).

Auditor’s Math for Calculating Losses

While assessing the presumptive losses to the exchequer director general Post and Telecommunication used three criteria that were hotly opposed by the government in power (19):

1. S Tel Ltd—a prospective licensee—applied for UAS licenses in July–September 2007. They wrote to the honorable prime minister offering to pay a higher price in the shape of additional revenue share for the next 10 years. They also expressed that in case of a counter offer they were willing to revise the prices upward. Using this as a basis to arrive at a presumptive loss figure works out to Rs. 65,909 crores.
2. TRAI in its report submitted in September 2006 recommended auction of 3G spectrum. In its report of 2010, TRAI observed that it was fair to compare with 3G rates and recommended 3G prices to be adopted as current price of 2G spectrum in 1,800 MHz band. Acceptance of these recommendations by the government can affect the valuation of the 122 new licenses and 35 dual technology licenses and increase it to Rs. 1,52,038 crores.
3. Substantial amount of FDI (in the form of equity) attracted by many of the new licensees in 2008. Based on this indicator value of a pan India license works out between Rs. 7,758 crores and Rs. 9,100 crores. Thus the total value for 122 new licenses and 35 dual technology licenses would be between Rs. 58,000 crores and Rs. 68,000 crores.

The presumptive losses owing to spectrum allocated to 122 new UAS licenses in 2007 to 2008 are given as follows:

Comparative Table of Potential Losses to the exchequer by the D G P&T

Category	Criteria for working out potential loss to exchequer (Rs. Crore)
	S Tel Rate	Rates based on 3G Audit	Sale of equity by the new licensee
			Unitech	Swan
New licenses	38,950	1,02,498	40,442	33,320
Dual technology	14,573	37,154	15,132	12,433
Beyond ­contracted ­quantity of 6.2 MHZ	13,841	36,993	14,052	12,003
Total	67,364	1,76,645	69,626	57,666

Source: Report No. 19 of 2010—Performance Audit of Issue of Licenses and Allocation of 2G Spectrum of Union Government, Ministry of Communications and Information Technology. http://cag.gov.in/content/report-no-19-2010-performance-audit-issue-licences-and-allocation-2g-spectrum-union

Reactions to the Report

The presentation of the report in Parliament in 2010 on November 16 triggered a storm both in the Rajya Sabha (Upper House) as well as the Lok Sabha (Lower House). Parliament proceedings were disrupted during the entire period of 22 sittings in November through December 2010 and no other issue was allowed to be discussed.

The PAC, called the CAG and his team for a presentation and members the members of parliament (who constituted the PAC) attacked the CAGs findings and the whole matter became politically vitiated. The main opposition party then demanded that a joint parliamentary committee (JPC)—consisting of representatives from all parties—be constituted to probe the scam. In March 2011, JPC was set up. Even in the JPC the atmosphere was uncongenial as opinions were split along party lines. Some of the members of the JPC questioned his authority, saying that he had gone beyond his constitutional mandate in pegging the presumptive losses (20). He was summoned again to come with relevant information and documents including action taken reports on the four former CAG reports, whether CAG had taken the DoT’s opinion. JPC then summoned the CBI, TRAI, and the Ministry of Finance.

The Reaction of the CAG and His Team

Vinod Rai and his team deposed before the PAC and then the JPC, and had to field questions from veteran parliamentarians such as Shri Yashwant Singh, Shri Sharad Yadav, Shri Gurudas Dasgupta, Shri Ravi ­Shankar Prasad, and Shri Sitaram Yechuri among others. During the entire ordeal, the CAG and team operated as one team; there were no media leaks, barring one aberration: R. P. Singh (the director general of Post and Telecom—P&T) who had prepared and submitted the 2G report claimed that he had been pressurized to prepare the audit report in that way. The CAG himself went forward to answer many of the tough questions being fielded by the heavyweight members of JPC and PAC, rather than leave it to his officers.

According to B. S. Chauhan, media adviser to CAG, Rai refused to be swayed by pressure from above (21) and defended the audit based on facts and data provided by the concerned team.

According to the bureaucratic grapevine there was pressure on Vinod to dilute the 2G report but he did not relent (22).

The CAG consistently gave weekly media briefings as part of the established system when reports were placed in Parliament. There was transparent sharing of information and regular updates. Public access to user-friendly audit reports (Noddy books) was another way in which information on various audit reports was disseminated. In 2010, Vinod appointed a media advisor to help him navigate the media labyrinth. Whenever possible, Vinod used various fora to share the CAG perspective on the case. He gave interviews in newspapers, business magazines, and on various TV channels.

An international peer review was initiated by the CAG on the performance audit function of the Audit and Accounts department. The review covered performance audit reports from 2010 to 2011. It was conducted by the SAIs of Canada, Denmark, Netherlands, and United States (23).

Since questions were being raised about performance audits, information was provided on how it was well within the ambit of the CAG (24).

Vinod Rai defended his position at an Economic Editor’s conference by saying, “I am making it clear that I do not think the CAG is exceeding its jurisdiction, because the basic responsibility of the CAG is to identify if there is any lapse,” and challenged the government to identify the specific breach of mandate CAG challenges government to identify ­specific breach of constitutional mandate (25).

A wild card: While deposing before the JPC, R. P. Singh—one of the key authors of the controversial telecom audit report by the CAG—told the Parliamentary Committee that the presumptive loss of Rs. 1.76 lakh crores was only a “mathematical guess” and inconclusive that the loss ­suffered in the sale of scarce radio-wave spectrum was only Rs. 2,645 crores (26).

Reactions of the Government Representatives and Media

Vitriolic attacks were made against the CAG in the media:

• Telecom minister Kapil Sibal had dubbed “utterly ­erroneous and without any basis” the estimated loss of Rs. 1.76 ­trillion, arrived at by the CAG on account of 2G spectrum ­allocation (27).
• When Kapil Sibal took over as telecom minister after A. Raja demitted office owing to the growing furore over the alleged telecom scam, claimed that there was zero loss to the government at the press conference that he held on January 7, 2011. He blamed the CAG for sensationalizing the 2G scam loss figures and said that policies should be left best to the government (28).
• “The 2G scam of 1.76 lakh crores is a myth,” according to P. Chidambaram, the then finance minister (29).
• Montek Ahluwalia, the former deputy chairman of the planning commission, said: “untrained staff is auditing CAG reports.” According to him, the performance audit was not credible as it was done by accountants not trained for the job. Ahluwalia went on to say: “The CAG’s primary work is to evaluate on financial parameters, but when it starts doing performance evaluation, it gets problematic” (30).
• At a briefing of five chosen editors in November, Prime Minister Manmohan Singh accused Rai of exceeding his brief: “Never has a Comptroller and Auditor General held a press conference as the present CAG has done.” The PM had also said: “It was not right for the CAG to go into issues which are not its concern. It wasn’t the CAG’s business to comment on policy issues” (31).
• Minister of State in the PMO, V. Narayanswamy, said: “The CAG has no authority or right to comment on the ­policy of the government but unfortunately it has questioned its authority, which is totally unwarranted and against the ­mandate given to them” (32).
• “Does the CAG have an agenda? Does he want to follow the footsteps of TN Chaturvedi (ex) CAG, of Bofors Report, BJP MP and governor?” asked Congress general secretary ­Digvijaya Singh (33).
• The Central Bureau of Investigation (CBI) also got into the fray, conducted its own loss assessment, which it pegged at Rs. 30,984 crores from 2G spectrum allocation in 2008 (34).

The Aftermath

The Supreme Court of India declared allotment of spectrum by the DoT as “unconstitutional and arbitrary,” on February 2, 2012. All the 122 licenses issued in 2008 during the tenure of A. Raja (then minister for communications & IT) were quashed (35). The court was of the view that A. Raja “wanted to favour some companies at the cost of the public exchequer” and “virtually gifted away important national assets (36).”

Appendix 1

Oath Administered to the CAG by the President of India

http://cag.gov.in/content/third-schedule/

Third Schedule

Section IV of the Third Schedule of the Constitution of India prescribes the following form of oath or affirmation to be made by the Judges of the Supreme Court and the Comptroller and Auditor-General of India at the time of assumption of office:

I…, having been appointed Chief Justice (or a Judge) of the Supreme Court of India (or Comptroller and Auditor-General of India) do swear in the name of God (or solemnly affirm) that I will bear true faith and allegiance to the Constitution of India as by law established, that I will uphold the sovereignty and integrity of India, that I will duly and faithfully and to the best of my ability, knowledge and judgment perform the duties of my office without fear or favour, affection or ill-will and that I will uphold the Constitution and the laws.

Appendix 2

Our Vision, Mission, and Values

http://cag.gov.in/content/our-vision-mission-and-values

Vision

The vision of SAI India represents what we aspire to become: We strive to be a global leader and initiator of national and international best ­practices in public sector auditing and accounting and recognized for ­independent, credible, balanced, and timely reporting on public finance and governance.

Mission

Our mission enunciates our current role and describes what we are doing today: Mandated by the Constitution of India, we promote accountability, transparency, and good governance through high-quality auditing and accounting and provide independent assurance to our stakeholders, the Legislature, the Executive, and the Public, that public funds are being used efficiently and for the intended purposes.

Core Values

Our core values are the guiding beacons for all that we do and give us the benchmarks for assessing our performance, independence, objectivity, integrity, reliability, professional excellence, transparency, positive approach.

Appendix 3

Organization Chart AG’s Office

Appendix 4

Organization Chart of the CAG’s Office

Shri Vinod Rai

(Comptroller and Auditor General of India)

Secy to CAG

Appendix 5

Details of the Audit Process

Audits include:

1. Transaction relating to debt, deposits, remittances, trading, and manufacturing.
2. Profit and loss accounts and balance sheets kept under the order of the president or governors.
3. Receipts and stock accounts. CAG also audits the books of accounts of the government companies as per companies Act.
4. In addition, the CAG also executes performance and compliance audits of various functions and departments of the government. Performance audit is based on the three Es—efficiency, economy, and effectiveness.

“Performance Audit,” assesses the operation performance of the government against preestablished goals and judges its accountability in the delivery of programmes and services that affects the well-being of fellow citizens, such as food, health, education, and employment. Performance audits, therefore, provide an early warning system to the administrator and help the government make mid-course correction.

The audit process in the AG offices is bottom-up. Every year, class 2 officers suggest various relevant organizations for audit. Their suggestions move up the hierarchy, get discussed, and then get finalized for detailed auditing. Teams fan out to various offices of the organization concerned and then the report is submitted to the Head Quarters. Before the actual auditing commences, there is an entry conference with the concerned department giving details of the approach and purpose, which is followed by the actual audit of accounts. A draft report is then submitted seeking views and finally an exit conference is held where the department is invited to participate. Once it is accepted, the report is submitted to the parliament and then to the PAC (Public Accounts Committee). The PAC might take up some of the reports for further probing, depending on its importance. Then the reports are sent to the concerned government departments for their use.

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