Ourview | Putting CAG in a cage

Ourview | Putting CAG in a cage

The Comptroller and Auditor General (CAG) of India performs some of the more vital, if mundane, functions in the country. Its audit reports are often the only authoritative source of how well (or how poorly) government departments are working. CAG’s importance can be gauged from the fact that the head of the agency is a constitutional functionary who can be removed only by a procedure that is identical to the one that applies to a judge of the Supreme Court.

As reported in Mint today, the Union government now wants to subject CAG to an audit by the Comptroller General of Accounts (CGA), an organization controlled by the Union ministry of finance. Certainly no institution can be “perfect". Institutions are products of human labour and as such subject to human follies. Every institution—except those under extreme duress, for example, under military rule— evolved and is subject to the same rules of learning that apply to any human situation. The effectiveness and speed of learning may vary, but it is there for sure.

It’s not clear what an audit of the expenditure incurred by CAG can do to improve its functioning. If improving performance is an issue, the “remedy" has to be applied elsewhere: the manner in which CAG carries out its audits. There is plenty of scope for improvement here, and some training and exposure can help the apex auditor do a better job. For example, some of the estimates for losses to the exchequer that it has put out lately are clearly unrealistic. But an audit by CGA is not an answer to this problem.

Then, there is the problem of “monitoring the monitor". If the apex auditor has to be audited, then this could be the start of adding additional bureaucratic layers. Something similar, albeit to a near pathological extreme, happened in the former Soviet Union where the entire system—auditors, inspectors, commissions, etc.—were geared to monitor each other. In the end, the system became rigid and ossified to such an extreme that the Soviet machine ground to a halt. India is in no danger of that eventuality, but adding additional layers to “check" functioning institutions is a recipe for inertia.

Finally, the politics of auditing CAG is short-sighted. The government has plenty of pressing problems at hand that need attention—from macroeconomic management to handling difficult external relations. Instead of focusing on them, it is concerned with—of all things—auditing the auditor. Its motives are clearly political. If only for the sake of the country’s institutional integrity, interference in CAG is best avoided.

Illustration by Jayachandran/ Mint

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