Citizens' Issues
CAG says it has right to examine government policies

Being effective does not mean hiding behind technicalities and overlooking something that was clearly patently opaque exercise of discretionary power, say sources from CAG

 
New Delhi: Rebutting the criticism by Government and the Congress party on coal blocks allocation, the Comptroller and Auditor General (CAG) on Wednesday said it has the mandate to examine and scrutinise public policies, reports PTI.
 
"...policies of a government do not emerge from vacuum but a culmination of a due diligence process that involves faithful examination and analysis of empirical evidence on the ground, higher values of governance, feasibility of implementation, materiality of financial costs and perceivable benefits based on current and reasonably predictable facts", GAG sources said.
 
As there is a close relationship between developments of public policy and its implementability and financial implications, the sources said, "it is unrealistic to expect that...C&AG's audit findings will not cast any shadow on the policy itself. Let us be real".
 
They were responding to criticism of the official auditor by the government and also an article written by Congress spokesperson Manish Tiwari questioning CAG's mandate to examine government policies.
 
CAG's findings that allocation of 57 coal blocks resulted in a loss of Rs1.86 lakh crore to the exchequer evoked sharp reaction from the government and Congress party. Parliament has also seen turbulence over the report.
 
Prime Minister Manmohan Singh had questioned the CAG findings on coal blocks allocation describing them as "disputable and flawed".
 
"The policy of allocation of coal blocks to private parties, which the CAG has criticised, was not not a new policy introduced by the UPA. The policy has existed since 1993 and previous government also allocated coal blocks in precisely the manner that the CAG has now criticised," he had said.
 
In a 32-point rebuttal of the CAG findings on the coal blocks allocations Singh said "the observations of the CAG are clearly disputable.
 
Tiwari in an article in The Indian Express on 28th August had said, "...the CAG does not have the Constitutional or legal mandate to make its own policy prescriptions and then utilise them to compute notional or even mythical loss or gain. Even when it chooses to do so, it ends up getting is grievously wrong. Headline-hunting is a volatile vocation -- perhaps it is time to stop this parody." 
 
CAG sources said sections 16 and 17 of the CAG's (Duties, Powers and Conditions of Service) Act 1971, uses expressions like "effective check" and "stock" with regard to the exercise of function by the official auditor.
 
Being effective, they said, "does not mean hiding behind technicalities and overlooking something that was clearly patently opaque exercise of discretionary power...something the honourable President of Indian National Congress (Sonia Gandhi) frowned upon last year".
 
They said that coal blocks constitute "stock" in the custody of Coal Ministry, "audit of its accounts certainly includes how such stock was disposed off and whether liquefaction of such stock has been done with due diligence..." 
 
Referring to the 13 June 2006 Office Memorandum (OM) of Finance Ministry, which Tiwari wanted to be quashed, the CAG official said, "the OM is a mere clarification. It neither enhances nor impairs the powers granted to the CAG as per the Act, to decide on the scope and extent of audit." 
 
The OM, they added, only gave formal recognition to decades old audit practice at a time when CAG was pleading for amendments to the C&AG (DPC) Act to spell out definition of audit in more clear terms.
 

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COMMENTS

M G WARRIER

4 years ago

The commendable work being done by CAG, is not the brain-wave of Vinod Rai or his predecessor who have sharpened the tools of audit to make them effective in the present context.
Performance audit is a concept introduced as part of commercial audit carried out by the then Indian Audit and Accounts Department in the late sixties. The purpose was to go beyond mere checking of accounts and ensuring that each item of expenditure was backed by a ‘voucher’ and find out whether the expenditure from public funds actually served the purpose envisaged when the outlay of expenditure was planned.
In the years that followed, the scope of audit has expanded along with the growth in public expenditure, multiplicity of sectors and ever-growing size of projects and extending geographies. As the funding comes ultimately from the taxpayer, the difference between public and private sectors is also getting narrowed down. Suffice to say, when CAG comments on nation’s resources ‘sold out’ to private sector, traditional accountants get a doubt about his jurisdiction.
India’s resources including financial resources deserve a more dignified treatment. If government or political leadership feel that CAG or for that matter any of the regulatory authorities should not comment on the performance part of policy decisions by ministries, it is time the country thought about having a separate authority to do the job. GOI should set up a ‘Performance Audit Authority’ which should have powers and competence to act as a watchdog to ensure that public expenditure is insulated from pilferages and leakages of the kind that are coming out every day. The present efforts of CAG, commendable though they are, do not result in online corrective measures which alone can minimize plundering of resources. Healthcare, not reasons for death through post-mortem, is the need of the hour for the Indian Economy as a whole.

Nifty, Sensex look extremely weak: Wednesday Closing Report

Sell on rallies is the rule for now

 


The market settled lower on extensive selling in blue chips and cautiousness ahead of the release of India’s first quarter GDP data. Yesterday we had mentioned that the bourses may see a bounce back. Currently the market is highly oversold. A small correction may soon be round the corner, however, the market is headed lower. The National Stock Exchange (NSE) saw a lower volume of 58.18 crore shares and the advance decline was520:1154.
 
The market opened almost unchanged from its previous close on indecisive global cues. Markets in the US closed flat overnight on mixed economic data while those in Asia sere mixed in morning trade today ahead of the central bankers’ meeting at Jackson Hole, Wyoming later this week. Back home, the Nifty opened nine points up at 5,344 and the Sensex started the day at 17,651, up 19 points over its previous close.
 
The benchmarks hit their highs in opening trade itself with the Nifty going up to 5,346 and the Sensex crawling up to 17,654. However, the gains were short-lived as the indices slipped into the negative in subsequent trade on pressure from IT, FMCG and metal stocks.
 
The market continued its downward journey in the noon session on a weak opening of the European markets on concerns about the slowing global growth. Sustained selling in blue chips became more rampant as only eight of the 30 Sensex stock were trading in the green in the second half of the trading session.
 
The benchmarks fell to their intraday low in the last half hour with the Nifty going down to 5,283 and the Sensex dropping to 17,471. 
 
Select buying in the last leg of trade saw the indices closing off the lows, but in the red for the fourth day in a row. The Nifty declined 47 points (0.88%) to 5,288 and the Sensex dropped 141points (0.80%) to finish at 17,491.
 
Among the broader markets, the BSE Mid-cap index declined 0.54% and the BSE Small-cap index dropped 0.85%.
 
BSE Fast Moving Consumer Goods (up 0.57%) and BSE Healthcare (up 0.27%) were the only gainers in the sectoral space. The top losers were BSE Realty (down 3.08%); BSE Metal (down 1.79%); BSE Auto (down 1.37%); BSE Oil & Gas (down 1.12%) and BSE Capital Goods (down 1.10%).
 
Tata Power (up 0.87%); ITC, Maruti Suzuki (up 0.50% each); Jindal Steel (up 0.31%) and Wipro (up 0.28%) emerged as the top gainers on the Sensex. On the other hand, Sterlite Industries (down 4.69%); Bajaj Auto (down 3.96%); Hero MotoCorp (down 3.30%); BHEL (down 2.89%) and Hindalco Industries (down 2.72%) settled at the bottom.
 
The top two A Group gainers on the BSE were—Wockhardt (up 6.74%) and Welspun Corp (up 5.90%).
The top two A Group losers on the BSE were—Jaiprakash Associates (down 9.23%) and Manappuram Finance (down 7.90%).
 
The top two B Group gainers on the BSE were—Sanghi Industries (up 20%) and Fintech Communications (down 19.09%).
The top two B Group losers on the BSE were—Blue Chip India (down 15.28%) and Landmarc Leisure Corporation (down 12.82%).
 
The key gainers on the Nifty were Tata Power (up 1.07%); Ambuja Cement (up 0.67%); Kotak Mahindra Bank (up 0.62%); Jindal Steel (up 0.60%) and Ranbaxy Laboratories (up 0.46%). The main losers were Jaiprakash Associates (down 9.58%); SAIL (down 6.28%); Sesa Goa (down 5.70%); DLF (down 5.16%) and Sterlite Ind (down 4.75%).
 
The Asian pack settled mixed on nervousness as the crucial central bankers’ meeting in Jackson Hole draws near. Investors are focused on US Federal Reserve chief Ben Bernanke’s comments that would signal fresh stimulus to prop the sagging US economy. Meanwhile, German chancellor Angela Merkel is set to make a trip to China later this week in a bid to gain assurances from the top Asian economy that it will support the Eurozone by buying the bonds of its stricken southern members.
 
The Shanghai Composite dropped 0.96%; the Hang Seng slipped 0.12%; the Jakarta Composite tanked 1.20% and the KLSE Composite shed 0.09%. Among the gainers, the Nikkei 225 advanced 0.40%; the Straits Times added 0.05%; the Seoul Composite climbed 0.64% and the Taiwan Weighted rose 0.40%.
 
At the time of writing, the three key European markets were down between 0.45% and 0.67% and the US stocks futures were marginally in the red.
 
Back home, foreign institutional investors were net buyers of shares totalling Rs93.09 crore on Tuesday while domestic institutional investors were net sellers of stocks amounting to Rs314.40 crore.
 
Strides Arcolab’s wholly-owned arm Onco Therapies has received US health regulator’s approval to market generic topotecan hydrochloride injection, a cancer drug, in the American market. Topotecan is a chemotherapy drug usually given to treat ovarian cancer, small-cell lung cancer and advanced cervical cancer. The stock fell 0.38% to close at Rs830 on the NSE.
 
McNally Bharat Engineering Company today said it has bagged a Rs122 crore contract from Steel Authority of India’s Bhilai Steel Plant. The contract is for external water system for mills and fire water pumphouse. McNally Bharat lost 0.06% to close at Rs90.20 on the NSE.
 
Public sector lender Vijaya Bank has tied up with SIDBI-promoted India SME Asset Reconstruction Company (ISARC) to tackle the issue of mounting bad loans in the banking system. Under the agreement, ISARC will act as a resolution-cum-enforcement agent for the bank for the resolution of its non performing assets. ISARC is in the process of execution of similar agreements with other public sector banks. Vijaya Bank declined 2.18% to close at Rs47.10 on the NSE.
 

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Get your car insured through mobile phone

With the launch of “Policy on the go” by Cholamandalam MS, car insurance has virtually landed on your palm, without you having to forage for it


“Policy on the go”, is a mobile application that you can download on your mobile and get instant quotes generated once you input all the factors asked for. The e-policy will be issued to you online as soon as the cheque gets realised and the documents and on-ground verification is in place.

 

The launch will necessarily reduce the time taken to get policies issued. You can do it on your own without the involvement of any sales agent. Besides, sales agents can also use the technology to help you get policies instantly. It reduces paper work as well as the other hassles and errors associated to it.

 

Almost all the other companies do offer online insurance plans for vehicles. Other websites also offer a comparison of policies that are most suitable to you on basis of what factors you input that govern your choice. But Cholamandalam MS is the first company to have gone a step further for ease of access by introducing the mobile application.

 

Online policies are different from the offline ones in the sense of the process by which the application is generated. Once the application gets confirmed, the process of verification of documents is initiated and a personal verification of the vehicle by the surveyors takes place. Once that is completed, the e-policy gets issued to you and gets delivered into your mail box, followed by the hard copy which could take anything between five to 10 days to get issued. The electronic copy is a valid proof of the policy, in case an event takes place before the hard copy gets issued, since it is digitally signed by the issuer.

 

The other good thing is, since it reduces the time and the resources required to complete the process, it reduces the costs for the company and the benefit might be passed on to the consumer. For that, we will have to wait and watch.

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