New Delhi: XBRL, or eXtensible Business Reporting Language, a computer language used for reporting financial statements, can help the Indian government detect corruption and wastage of funds in state-run programmes such as the rural jobs guarantee plan, according to the Institute of Chartered Accountants of India (Icai) and the Ministry of Corporate Affairs (MCA).
“XBRL can help detect things like leakages, misuse, under utilization of funds, etc. at very disaggregated levels,” said G. Ramaswamy, president of Icai. “Since these programmes involve Centre, states, districts and panchayati raj institutions, diversion of funds can happen at any or multiple levels.”
The technology may help the government track diversion of funds and target beneficiaries more effectively in programmes such as the Congress party-led government’s ambitious Bharat Nirman and Mahatma Gandhi National Rural Employment Guarantee Scheme, or MGNREGS.
As much as 30% of the funds allotted to the job programme, which currently uses social audits by independent bodies to check the misuse of funds, may not have reached the beneficiaries, according to T.V. Mohandas Pai.
“XBRL can prove to be an important tool in tracking diversions in government expenditure besides providing a common database which can be used by the stock exchanges, capital markets regulators, etc,” said Pai, director of human resources, education, and research and board member of Infosys Technologies Ltd.
Government departments in several countries such as China and Singapore already use XBRL to report their expenditure, he said. XBRL is an electronic format for communication of business and financial data that helps in dissecting large amount of data and can highlight anomalies.
MGNREGS, Sarva Shiksha Abhiyan and Bharat Nirman are programmes for rural employment, elementary education and rural infrastructure, respectively, funded by the government.
In the budget for the year to 31 March, RS31,000 crore was allocated for Sarvya Siksha, Rs40,100 crore was allocated for MGNREGS and Rs48,000 crore for Bharat Nirman.
Based on the utilization of funds by states, additional funds are released through supplementary budgets.
In its audit report, tabled in Parliament in October 2008, the national auditor criticized poor record maintenance, delayed payment of wages and non-payment of unemployment allowance at MGNREGS projects. The Comptroller and Auditor General of India, or CAG, which studied the performance of the job programme in 68 districts of 26 states, reported irregularities such as diversion of funds and mention of work that did not exist, and lack of proper reviewing and oversight mechanisms.
Icai also plans to offer help to government departments to adopt XBRL for reporting their income and expenditure.
The corporate affairs ministry is “about to finalise its implementation programme on XBRL in a week’s time,” said an official at the ministry, who declined to be identified. “Besides asking corporates to file their returns using XBRL, the general purpose XBRL tool being developed by MCA will be available to other government departments for data analyses.”
Last week, market regulator Securities and Exchange Board of India announced a plan for mutual funds to put in place a unified filing system using XBRL.
In India, the XBRL platform for regulatory filing is nascent, with the Reserve Bank of India, Bombay Stock Exchange, National Stock Exchange, Sebi and MCA initiating partial filings.
Ramaswamy also said XBRL will be an important tool that can help the government take remedial action on leakages and at the same time be answerable to people who want to know how funds for these programmes have been utilised.
MCA, with the help of ICAI has developed a taxonomy, which defines financial terms used in business reporting, so that a common database can be created for use of all regulators and government departments.