Citizens' Issues
Public Interest Exclusive
Catch them with hands in the till; CAG reports are post-mortems

The CAG is an excellent weapon. Unfortunately, the CAG reports are all post-mortems. We need something that may be described as “concurrent audit” of government deals, a detective’s review of the proposal at the point that the final decision is to be made

First, it was the Mundhra scandal, an affair so small that Raja and other scam kings of today won't even sniff at it. The details are not worth recalling but the scandal was good for newly Independent India.

It warned the country that corruption is an ever-present danger; and the government's response showed honesty and integrity were still alive in India. TT Krishnamachari, one of the most brilliant financial minds the country has produced, was the finance minister. He resigned when the scandal broke and it was clear that the finance ministry was involved.

Then came Bofors, which sent out exactly the opposite message. It was good news for crooks and bad news for the country. The message was that the Congress party and its government would go as far as necessary to stonewall investigations and protect the guilty, the obvious ones and the shadowy figures in the far background.

Bofors announced the code word-Open Sesame-to open and loot Ali Baba's cave. It told the crooked that it was open season to raid the treasury.

Fast forward to 2010 AD. The Comptroller and Auditor General (CAG) announced that the country has suffered a probable loss of Rs176 lakh crore in the distribution of 2G (second generation) spectrum licences.  Even today, I cannot, off the top of my head, say how many zeroes follow the 176 in that number.

Bofors was penny ante stuff. The mind boggles at modern numbers. Add to this the projected loss in Coalgate and we get a bigger lot of zeroes which I have to count on my fingers.

Add the loan loaded on to the innocent Air India in order ensure windfall profits for a few aviation entrepreneurs, the land scams in Maharashtra, land-grab arrests in Tamil Nadu, illegal iron more mining in Andhra Pradesh and Karnataka, et cetera, et cetera, et cetera as the King of Siam keeps saying in "The King and I" and we get a figure that is one-third of the way to the googol.

A googol is 10 to the power of 100 or 1 followed by 100 zeroes. It was invented by Edward Kasner, a mathematician of the early 20th century, and the name was given by his nine-year-old nephew. Kasner used it to illustrate the difference between an unimaginably large number and infinity. It is useful when comparing with other very large quantities such as the number of subatomic particles in the visible universe or the number of hypothetically possible chess moves.

Googol can be used to indicate the total amount of graft and black money that can be siphoned off from the Indian economy. In 2062, fifty years from now (is this an underestimate?) this amount will total Rs Googol.

Any way of stopping this or slowing down the juggernaut? You, me and the man in the street have plenty of ideas which have to be developed and refined. Let me put one forward for consideration.

The CAG is an excellent weapon. Unfortunately, the CAG reports are all post-mortems. The CAG looks at government operations long after they have been completed. Taking the 2G spectrum case as an example, a lot of people knew that something illegal was going on during the process of allocating the licences but they did not have documentary proof to pin down the illegalities or estimate the amount of black money was created. Only the CAG report could surgically cut open the whole operation, with Raja conducting the full orchestra of the government, and display the anatomy of India's biggest scam to the public.

 Some culprits have been caught but many more have escaped. The money was gone, hidden under plants at the bottom of the garden or sitting in bank accounts abroad or financing the trade in weapons and drugs; solely because the CAG report was only a post-mortem.

We need some mechanism which catches the scamsters when they are going about their dirty work; like catching a thief in the act of breaking open the safe in your house. We need something that may be described as "concurrent audit" of government deals, a detective's review of the proposal at the point that the final decision is to be made.

Consider the example of Air India. Air India got into trouble because Praful Patel wanted to buy 111 planes. Everything would have been fine if, as prudential financial norms dictated, a proper plan to raise the funds for the aircraft had been formulated. The funds should have come from a mix of equity, retained earnings, loans and leases.

Instead, Air India was loaded with an unbearable loan burden of Rs38,000 crore and the proposal went through on the nod, right past even the Cabinet. If we had a system of concurrent audit, the detective review would have cried 'halt' and Air India would be healthy now. Prevention is better than cure?

(R Vijayaraghavan has been a professional journalist for more than four decades, specialising in finance, business and politics. He conceived and helped to launch Business Line, the financial daily of The Hindu group. He can be contacted at [email protected].)




5 years ago



5 years ago

Like CAG, even income tax asessments, investigation and work also constitute post mortem and all are happy! It is merely a question of sharing the loot!

C Jyoti

5 years ago

Thanks for this article. Will it find its way to to the CAG's table/office? This is what a former (highly controversial and unpopular) Fin Dir of an economic ministry had long ago noted in a file incurring the displeasure of the higher authorities. CAG even, in its role of doing Commercial Audit, was found by that officer of the revenue service to overlook glaring instances of siphoning off of funds from the PSUs for "other" purposes. Of course, the huge PSUs were known for their "hospitality"--a practice and tradition still continuing. Revenue audit is no better either. The preference shown in awarding huge audits to the "Big Four" and the firms of the "Past Presidents" of the chartered accountants, apart from too many gaffaws in the audit reports drawn up depending upon the "receptivity" of the auditeee PSUs, etc., the organization is no better than any other in the govt. set up, considering that the officers come through the same source/exam. And, moreover, the chief is an IAS, not an IA&AS. In addition, the job of an auditor includes certain expertise which the IRS officers spending their lives and careers in tracing and trailing black/unaccounted income and, unless they are invariably included in the team of the IA&AS with dignity and equality, CAG's findings will ultimately be fodder for the media alone. The mindset of the officers must change, as much as the approach to audit and, moreover, total transparency MUST be there in awarding audits to CA firms vis-à-vis the image and goodwill of the firms. At present, there is too much trust deficit between the CAG's office and honest CA firms, many older in existence than those started by the ex-office bearers of the ICAI !
The article could deal with this aspect too.

Nagesh Kini FCA

5 years ago

Audits per se appear to be sheer post mortems carried out long after the transactions take place.
This systemic deficiency can also be corrected by putting in place pre-audit and concurrent audit clearance for pre-determined transactions.
This practice is suggested both for the Govt. but also for corporate audits under company law.
There ought to be will to introduce this system.


5 years ago

On the dot. Brilliant idea. When bank officials are subjected to concurrent audit, why not govt. officials ? But acre to be taken to see that concurrent audit process is free and independent like CAG. Or CAG itself should take it up.

a v moorthi besides TIHAR

5 years ago

One is missing an important point that all scams happen because the concerned officials are either inefficient or corrupt or both. In 2G scam the abrupt change in last date of applications was the entry point of corruption. The sale of equity by Unitech by itself is not a crime but what was criminal is collecting bribe by Kalaignar TV ( MAJOR SHARE HOLDERS BEING wife and daughter of Karunanidi) as a soft loan. without an officials signature no order in Govt can be issued. if officials obey unfair instruction of their superior officers or Minister it is because they are corrupt or inefficient, as they don't know Shah Commssion ruling on conduct of Govt servants makes it clear non obeyance of illegal instructions are not acts of insubordination. Time will show auctioning of scarce resources may not be the right solution. Republic of Bellary was there because Govt officials of the forest dept, octroi check posts, port every one accepted speed money as per their hierarchy. Our Judicial system also to be blamed because cases drag on for years. DRT courts were set up in mid 1990's to complete recovery of assets by banks in case of defaults with in months but fact is DRT cases are pending for years . Conduct of lawyers like R.K.Anand show rival advocates join hand to keep cases hanging so that their earmimgs remain unaffected.

Life Exclusive
US presidency: The president and the Muslim world

Early in his presidency Obama realized that the Muslim world would constitute the most important foreign policy challenge for the administration. It will be up to Romney to come out with an alternative vision to his advantage

Within just a few weeks what was looking as a really troublesome aspect of foreign policy-the Iranian Nuclear Imbroglio-has at least for the moment settled down and it seems as if president Obama will carry the advantage in the foreign policy into the election. Generally it is the Republicans who have a foreign policy advantage-they are traditionally more hawkish which somehow seems to translate as foreign policy expertise while the Democrats are generally on the back-foot trying to explain their foreign policy. But the two wars that were started under the Republican administration of George Bush-the 'necessary' war in Afghanistan and the 'unnecessary' war in Iraq. Both of which have dragged on for many a year seem to have dulled the appetite of the American public for war and have taken a heavy economic toll, which combined with the Great Recession, has led to a greater appreciation of the "leading from behind" policy of president Obama.
Early in his presidency Obama realized that the Muslim world would constitute the most important foreign policy challenge for the administration. He also realized that the relationship with the Muslim world was broken and that a new deal was needed with the Muslim world to make for a safer America and a safer world. He addressed the Muslim world from a University in Cairo on 4 June 2009. He greeted them with a Salaam Alekum. He said that the cycle of suspicion and discord must end. He stated that a tiny minority of extremists had taken over the agenda. He said that he came to seek a new beginning between America and the Muslim world-one based upon mutual interest and mutual respect and that America and the Muslim World are not exclusive and need not be in competition. Obama sought to find common ground between the US and Islam. He addressed the wars in Afghanistan and Iraq and said that he would bring back the troops from Iraq and that he would bring back the troops from Afghanistan as soon as he came confident that no threat was posed by extremists in Afghanistan and Pakistan. He addressed the two state solutions for Israel-Palestine. He offered a dialogue on Iran so that Iran and the US could move forward. He addressed the issue of democracy in the Muslim world. He addressed religious freedom of religion and women rights and many other issues.

The president has succeeded in winding down two wars that he had inherited-the war in Iraq which he had inherited and which he campaigned against and the war in Afghanistan which has gone on far more than a decade and though the resolution is less than perfect the situation is certainly better than what he inherited. Also the sustained assault on Al Qaeda has resulted in a considerable weakening of the extremist group. The most significant achievement in this regard is the killing of Osama Bin Laden, the leader of Al Qaeda who was holed up in Abbottabad, Pakistan. It was a particularly risky decision given that the agencies told him that the chances of it being Bin Laden were only 50%. Also the nuclear imbroglio with Iran has been tempered down with the latter returning to the negotiating table as the sanctions bite. This has considerably reduced the chances of a conflagration in the Middle East with a preventive strike on Iran by the Israel.

Further is the remarkable Arab Spring which has spread from Tunisia to Egypt liberating wide swathes of people from years of Autocracy America can justly claim a share of the credit because they have generally played a helping hand in promoting freedom though Dick Cheney claimed that the Iraq war  was the catalyst for the Arab Spring. The spread of democracy has always been a goal of the US foreign policy and though this has also led to the citizens of these countries turning to Muslim parties; it seems that grassroots of democracy is taking root. Further the resolution in Libya which America supported has been satisfactory.

All in all, these events should give president Obama an edge in the foreign policy in the coming election. The usual Republican advantage in the foreign policy should be neutralized. But there are serious problems that remain. One of the major problems is the insensitivity that the Americans show to their Muslim allies. Then the recent instance of the way their Afghan allies were travelled after a staff sergeant went on a rampage in Afghanistan, as also the stalemate in Pakistan about the apology demanded for the killing of 24 soldiers on the Afghanistan- Pakistan border.

With the help of technology (read Drones) the Americans have been able to bypass their allies while carrying out missions from the sky to take out militants, though sometimes with tragic collateral damage. The results seem to be satisfying but the price that America might be paying in terms of resentment of the people for collateral damage as also the violation of sovereignty may be difficult to calculate. Its validity in international law is also troublesome at best.  Meanwhile the two long-drawn wars have ensured that at least in the foreseeable future there will not be American boots on the ground in terms of troops. The new defence budget stresses the use of special forces rather than full blown military operations.

It will be up to Romney to come out with an alternative vision and Americans may not been on a mood for simple hawkishness. His stand against Iran as also China (regarding currency manipulation) may both turn out to be counter-productive and need to be more nuanced.

In this topsy-turvy election foreign policy may well be a democratic advantage.      

(Harsh Desai has done his BA in Political Science from St Xavier's College & Elphinstone College, Bombay and has done his Master's in Law from Columbia University in the city of New York. He is a practicing advocate at the Bombay High Court.)


Public Interest Exclusive
Bangalore flat owners suffer from a plethora of problems

In the “Silicon Valley” of India, plumbers, carpenters and water supply are scarce while flat-owners bickering among themselves in illegal “associations” formed to run the buildings

There are essentially two types of residential buildings in Bangalore. The first type is those that are constructed by builders who use tracts of land from their land bank. The second is those where an independent home owner (often called a 'promoter') enters into an agreement with the builder to sell the plot to him. In return for the same, the builder demolishes the structure and constructs defined number of flats, of which, some of the flats are sold in the outside market. The balance flats are owned by the promoter. So, for instance, if the builder constructs 20 flats, depending on the type of contractual agreement, eight flats may be sold in the outside market while 12 flats may be retained by the promoter.

The flats built by top-notch builders like Prestige, Embassy, Mantri, Sobha Developers and Puravankara are sold at a premium depending on the location and the amenities available. These developers are particular about aesthetic appeal of the structures and also provide facilities like round-the-clock security, comprehensive elevator maintenance, swimming pool, gymnasium and a club-house. It is another matter that Bangalore faces a severe water shortage and so most of the swimming pools are defunct.

Water supply: There are essentially two types of water connections in flats in Bangalore. One is the borewell water that is used for cleaning and washing. The other is the supply from the municipality, popularly known as Cauvery water. The quality of the borewell water is such that it can corrode even your stainless steel vessels. The Cauvery water can't be used for drinking without filtering. Many areas in Bangalore do not have even the Cauvery water facility. So, it becomes a field day for drinking water suppliers. I have seen at least 15 different brands of mineral water supplies and people consume them simply because they are packed and sealed. They seldom worry about the nitty-gritties like whether the source of water is good or if the water is purified.

Incessant drilling for borewell water: Walk into any of the narrow by lanes of Bangalore and at any time of the day (or night) you can hear the huge noise of borewell machines drilling the ground. One of the residents near our area had drilled the ground and the noise stopped after 72 hours of incessant drilling. Even as we were wondering what happened, the penny dropped that the resident had become a supplier of tanker water. He proudly displays the board-"Manjunatha Water Supply".

Funny associations: Every building has a so-called association that has no legal standing. The so called municipal bye laws are rarely ever complied with. The association meets once a year to discuss the most absurd and silly issues that one can never imagine. However, they never discuss things like sinking fund, financial management of association funds, etc. Anyone who questions the association is bad but people who are silent spectators are good. I know of associations where bank balance of around Rs2 lakh lies idles in a SB account at 4% interest but the association members cringe to give Rs50 for menial work like tank cleaning, removing the weeds in the garden, etc. Despite the fact that water is in short supply, people wash their cars as if there is no tomorrow. Every household has a minimum of four vehicles-two cars and two scooters/bikes.

One can see independent home owners throwing garbage on the road and using water to wash their gates and the streets outside their homes. Even the IT crowd that stays in flats under a leave-and-licence agreement are quick to buy large vehicles (thanks to easy availability of vehicle loans), regardless whether there is adequate parking space or not. In case of independent home owners, they avail of free parking facility on the road. Many independent home owners block the roads to put up a shamiana to celebrate family functions.

Plumbing woes: There is a severe shortage of skilled and unskilled labour in Bangalore so if you are looking at repairing something, you are in for a rude shock. One has to cajole the carpenters and electricians to get your work done and they won't touch the debris generated.


Anyone with plumbing tools and tackles passes off as a plumber. On most occasions, these unskilled technicians aggravate the plumbing problem instead of solving it. Builders do the vanishing act once the flats are sold, so there is little recourse on that front. The second rung builders also do not worry about doing the plumbing in an aesthetic fashion. So, you will have drainage pipes bang above the parking lot on the front side of the building. Leaking water taps are never rectified.

Legal issues: In Bangalore each flat owner is given a 'khatha' certificate that indicates that he holds the share in the area on which the structure has been erected. To get this certificate, you have to grease the palms of people in the registration office. This system is something like the conveyance deed scheme in Mumbai (though there are differences). Other than this, one has very little control on what happens in the premises. Flats are bought and sold without anyone's knowledge. There are no transfer fees payable to the association. There is no need for a "No Objection" certificate at all, when flats are sold. Likewise, tenants walk in and out of the buildings, stay and vacate the flats as though it is a lodge. Neighbours rarely open the door to each other.


Final Word

Despite being called as the "Silicon Valley" of India, the Garden City has not managed to keep pace with the changing times. Monstrous transformers stare at you from every nook and corner. Garbage is handled manually by scavengers who sort the garbage right on the road. Hooligans pass off as auto rickshaw drivers. Bus conductors do not issue tickets for short rides and even if you insist on a ticket, they brazenly ask you to return the ticket so that the same can be reissued. Street dogs swarm every street. The only advantage of living in this city is probably the anonymity it offers you.



Jony Loe

2 years ago

Pointed everyting to the fact, nice article Mate!!


4 years ago

Its business as usual for the killer builder Mohammed Salim as several illegal buildings around the city continue to rise making a mockery of all those who lost their lives in the Someshwara Nagar building collapse on August 19, 2013. Obliviously, this cannot happen without the conniving of corrupt local authorities, corporators and BBMP officials. They are all part of this evil nexus that plagues India. There was a hue and cry when the illegal structure in Someshwara Nagar collapsed prompting public outrage. Officials rushed forward with statements of action, yet the builder is repeating ‘Someshwara’ type building all across the city. As usual the bond between builders and the corrupt local authorities is stronger than public memory.

A seven stories illegal structure without any parking facility or safety features is being readied for delivery in 4th Cross, Kempiah Block, better known as Mubarak Nagar under J.C Nagar police limits. The illegal structure is serviced by a narrow staircase just a foot across. The congested street leading to the building has barely enough places for a two wheeler to pass through, how will this take the traffic of 30 plus additional families crammed into a small pigeon hole style apartments? What about utilities and sanitation, are these approved by BBMP? Why are unsafe Chawl like buildings allowed to be built in crowded residential areas, is this the City planners new vision for a better, beautiful and sustainable Bangalore? With the influx of builders like Mohammed Salim, it’s not just lives that are at risk. The heritage and character of Bangalore are also at risk, the authorities in Bangalore will need to do some soul searching and act now to save Bangalore.

Radha Hari

4 years ago

aptly explained without twists


4 years ago

April 2013
There is a massive borewell drilling going on in and around Bellandur and Sarjarpur junction areas -where the remaining agricultural land/trees are being butchered down, flattened for those ultra luxurious hi-rise apartments. In the past 2 weeks three bore wells were drilled in the bellandur area alone within a 200 mtr radius-- drilling continued for 3-4 days continuous to reach the water tables. One of them is being used by a Tanker mafia to fill his tankers on 24 hr basis. New projects like SRR group opp Total Mall, Nitesh Estate, Purva, Salarpuria etc is currently in the process of drilling thousands of feet deep borwells to suck out the remaining water, whatever is left, to use for their mammoth construction work. The so called residents who buys this ultra premium apartments will be left at the mercy of the tanker-mafia to meet their daily water requirement. Absolutely no sanity in this development. The BWSSB is sleeping as usual , palms greased, and merrily approving more borewells to be sunk where 99.5% of existing bore wells had gone dry. The end game is those greedy land owners and developers will go filthy rich and their families will ultimately retire in prosperous lands leaving a bunch of migrant / so called affluent people buying these flats on a drought stricken township to fend for their basic amenities themselves.


4 years ago

I fully agree with you. The apartments constructed in a jiffy give rise to several repair issues. I had bought a flat 2 years ago in bannerghatta and within a year the electrical wiring and plumbing issues begun and i was really shocked. It seemed i was not alone in this boat. The other apartment owners were already facing the issues and the electricans who probably couldnt understand E of Electricity were repairing and spoiling it further. Their un-professional behavior and give a damn for quality really made me do a research on this. As a US returned i was expecting an excellent services company but when i went on the web i found wolves in sheep clothing. Finally one of my friend reffered me to Blue Impulse and finally i had my electrical and plumbing problems repaired. Thank God the guy who looks after the company is very well educated from REC and he has employed really soft and professional people who did a great work at my flat. Now after re-wiring and re-fixing plumbing issues the flat looks great. We have now handed over the carpentry works to them. you can search on google as "Blue Impulse India" or "Blue Impulse bangalore" and get to know about them. Hope this helps people struggling with labor issues.



In Reply to Basanth 3 years ago

I am looking for a flat in banglore. whitefield, marthalli these areas have water issue i read everywhere. Is it the same case in bannerghatta side also? where should i look for a good flat..i m confused

Vinaya Kelkar

5 years ago

Agree with author. During nights, street dogs bark continuously, fight among each other and spoil the sleep. During days, the members in Assembly bark continuously, fight among each other and spoil the peace of citizens.

Nagesh Kini FCA

5 years ago

The concept of cooperative housing societies that was born in Mumbai is fast taking root in Bengaluru too.
Since this type of ownership is new to the city the Karnataka - when it is not busy with the infighting - Govt. to get its babus to study the Maharashtra laws of housing but also the working with civic, revenue,law authorities and residents' groups like the BMC recognized Citizens Advance Locality Management set up at the neighbourhood levels.


5 years ago

Now, that u hate Bangalore so much, u should get yourself a one-way-ticket out. And don't let the door hit ur A$$ on the way out!


Truth Seeker

In Reply to Michael 5 years ago

Michael ,Truth is often bitter.

As you turn a bind eye,the BBMP is deciding whether to go for IPAD2 or IPAD3 for the corporators.The corporators are also busy in forcing clubs to give them free memberships.Who has time to solve civic issues?.Afterall, all the problems are due to the outsiders working in the IT industry.What say?


5 years ago

My God. There are lot of half truths in this story. It is not all that bad. It is written as if we are living in a posh slum. Compare to all the other cities Bangalore is the best and that is the reason why so many companies are coming here and many more want to settle here.
Local transportation is best and any body can vouch if they have travelled from airport by Volvo buses which none of the other states have.
Yes we do have problems but can't complain much if you have stayed in Mumbai,Calcutta and new Delhi, and compare to them our city is the best


R Nandy

In Reply to Sreepathid 5 years ago

I think both of you are correct partially.What the writer has said is certainly true for the new areas of the city especially ORR, whitefield, Sharjapur Road etc. The situation
is much more stable in the older parts of the city.I guess you have the older areas in mind while writing the comment.

I would additionally add that most of the newer areas are drying up with no water coming up in the borewells.Many of the apartments are forced to buy water from tankers especially in areas like Whitefield,ORR,Sharjapur Road,C.V.Raman Nagar since the borewells have dried and
there is no water supply from the corporation.In many of the areas like Sharjapur Road the tankers are contolled by the Water Mafia who artificially jack up the water prices.The going rate now is Rs1000 for a small tanker.Since the water is so costly many associations are forced
to ration water for a few hours in the morning and evening.The water pressure is also not adequate
as the water gets used up very fast to use appliances like Geyser,Water Purifier,washing machine
etc. For those who don't know, these new areas are the hub of the IT industry and most non local
IT professionals stay here.Having stayed in a 'new' area for a couple of months I have first hand experience. The new areas also don't have any public parks.

The public transportation system is almost non-existent(if you compare with the other metros).
I had found it totally unusable except for the volvos. Everyone is forced to keep a bike and/or a car.

does it matter

In Reply to R Nandy 5 years ago


To me authors view seems myopic.
I stay in one of the so called new areas (HSR-Sarjapur road and by the way it is Sarjapur and Not Sharjapur) and face water crisis once every month (but only during summer). Water is an issue but not as critical as highlighted. It all depends on the builder and the amount of active your society is. In my society of approx 60 families, we celebrate nearly all the festivals known (holi, diwali, Eid, Christmas and even thanks giving, before moving in I was not even aware how is it celebrated). So nothings perfect, just find the builder who is not in just for one building and things should be OK.

R Nandy

In Reply to does it matter 5 years ago

It does matter.Since,the water level is going down every year bore wells are not fetching any water in many areas.The builders are mostly concerned in selling their apartments and they can't guarantee there will be bore well water after possession.To be fair to the builders and the associations,they can't manufacture water if the bore wells dry up.The only sustainable solution is to get corporation water at a reasonable cost.Buying tanker water at an exorbitant cost and overexploiting ground water is hardly a economically or ecologically sustainable solution.The way the BBMP is working I don't think anything will happen.Your apartment might be getting bore well water but what's the guarantee that you will continue to get bore well water say after 5years? Once they bore wells dry up,then people can't even sell their exorbitantly priced flats and move out as there will be no buyers.

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