According to the CAG, industries vulnerable to abuses of capitalism based on rent seeking, include banking, mines, telecom spectrum, utilities, oil and gas and public infrastructure
Regretting that economic progress has thrown up a class of 'rent seekers', Comptroller and Auditor General (CAG) Shashi Kant Sharma on Tuesday said the CAG will continue to audit private companies and private public partnership (PPP) projects in cases, where revenue sharing with the government is involved.
Speaking at a conference on corporate fraud, he said, "Work on telecom audit is already in progress and I am hopeful that our first report would be ready before the year end. A report on gas and oil exploration will be presented to Parliament soon. We will be taking up performance audit of some ongoing PPP projects shortly".
Noting that CAG audit will not cause any discouragement to investors, Sharma said, "in a mature market economy, where there is very little scope for manipulations and fudging, why should companies fear such audit if they have nothing to hide."
Capitalism based on rent seeking, he said "is not just unfair, but also bad for long term growth. In such an environment, resources are mis-allocated, competition is repressed and dynamic new firms are stifled by better connected players".
Rent seeking refers to instances when a company or individual uses public resources to obtain economic gain from others without reciprocating any benefits back to society.
"Many of the corporate tycoons, throughout the emerging economies, are today accused of making fortunes by 'rent seeking'. They want to grab a bigger slice of the pie rather than making the pie bigger," he said, adding the industries vulnerable to such abuses include banking, mines, telecom spectrum, utilities, oil and gas and public infrastructure.
Although several private companies, specially in telecom, oil and power have resisted audit by CAG, the Supreme Court in its latest judgement had ruled that any entity using public resources in its business and sharing revenue with the government can be audited by the CAG. "Our stand has been the same since long," Sharma said.
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