Vinod Rai: Auditor or crusader?17 min read . Updated: 03 Apr 2013, 12:10 AM IST
Vinod Rai is the face of a new, more assertive, even aggressive, Comptroller and Auditor General
Vinod Rai is the face of a new, more assertive, even aggressive, Comptroller and Auditor General
New Delhi: In February, speaking at the third anniversary of the Moneylife Foundation in Mumbai, Vinod Rai, India’s comptroller and auditor general, quoted from Shakespeare’s Julius Caesar: “There is a tide in the affairs of men which, taken at the flood, leads on to fortune," recited the nation’s accountant-in-chief, in his careful, measured tone. “On such a full sea are we now afloat, and we must take the current while it serves or we lose all our ventures."
It’s a message that Rai has hammered home in speeches he’s made from Bhubaneswar to Boston over the last few months: if India is to fix its reputation for untrammelled corruption, it must do so today. According to Rai, there is no time to waste.
“2012 will go down in the history of Indian democracy as a defining year," Rai told his audience. “A year in which the citizen came centre stage and debunked the age-old myth of the silent majority... The conventional architecture, along which governments are expected to function, needs to be tempered."
Rai’s words might have been carefully chosen, and his phrasing circuitous, but his call to action was unmistakeable—an argument for revolutionizing the way government operates, expanding the number of stakeholders and, by implication, limiting the reach of the people in power. This air of crusade has become inextricable from Rai’s public image since he was given the job as the financial watchdog of the government in 2008.
To many, Rai is the face of a new, more assertive, even aggressive, Comptroller and Auditor General of India (CAG). During his term, which will end on 22 May, the day before his 65th birthday, Rai has produced a string of audit reports disclosing corruption within various levels of government in fields as varied as the 2010 Commonwealth Games, the allocation of second-generation (2G) spectrum licences and of coal blocks, wasteful expenditure on the fertilizer subsidy, lapses in Air India Ltd’s acquisition of aircraft, holes in defence spending, the sale of sugar mills in Uttar Pradesh, and anomalies in the award of contracts to exploit natural gas reserves.
Rai, who declined to be interviewed for this profile, has acquired multiple reputations: as an effective manager, a ruthless investigator, an activist zealot, a bully, a patriot, an upstart. It’s not surprising that he makes jokes about not having many friends. But, for a divisive figure, the comptroller and auditor general is not as openly aggressive as, say, anti-corruption campaigner Arvind Kejriwal. Rai affects an elegant and understated manner, armed with a self-deprecating sense of humour that belies his reputation. He is somewhat coy and evasive with reporters, avoids giving interviews, and prefers to speak from a dais.
That’s not to say he always plays safe. Last month, after Rai made a speech at the Harvard Kennedy School, his alma mater, information and broadcasting minister Manish Tewari criticized him for being unpatriotic. “And this is not the first time that he has done it," complained Tewari, according to a report in The Indian Express. “I think constitutional authorities, you know, should circumscribe (him)."
Tewari chose not to comment when contacted by Mint. “My CAG-baiting days are over," he said over the phone.
Rai has been more inflammatory when he’s speaking at home. In Mumbai, he claimed the usually apathetic middle class was stirring itself to action.
“This class of people who...took pride in not going to vote, who looked down on caste and regional politics... This disparate group is now aggregating, it is uniting for a cause. It seems to feel its strength," he said. “What stirred them? Maybe corruption at every government office."
A career bureaucrat, having spent 35 years in the Indian Administrative Service (IAS), Rai is a part of the system he criticizes, which makes him all the more authentic to his audience.
“I believe...(the surge of popular anger) has taken the administration by surprise," he said in Mumbai. “They were neither prepared nor attuned to such an awakening. They cannot conceive of spontaneous crowds collecting; they are only accustomed to paid crowds being mobilized for political rallies." His sombre audience burst into spontaneous applause.
Is it tempting to see Rai as the man of the hour, without whom the revelations of the past couple of years would not have been possible. “I am convinced that it is his personality that has allowed him to unleash the power of the office of the CAG," said a senior IAS officer currently working in Kerala who didn’t want to be named. “He takes leadership. He works like a general commanding his forces."
Others see his rise as coincidence, part of a broader series of social and political shifts—the enactment of the Right to Information (RTI) Bill in 2005, for example, or the emergence of anti-corruption campaigners such as Anna Hazare and Kejriwal. “Rai achieving fame as the CAG was largely incidental, because of the circumstances...anyone else in his place would have done the same," said an Indian Audit and Accounts Service officer currently on deputation outside CAG, who also wanted to remain unnamed.
Rai was born into an army family from Ghazipur, Uttar Pradesh. During his childhood, the family moved around a lot, eventually settling in Lucknow and Delhi, where Rai attended Delhi Public School on Mathura Road. After his father was posted in Sikkim, Rai was sent to a boarding school at age 14 at the Birla School in Pilani, Rajasthan. His school career was a happy and successful one, according to his teachers and contemporaries.
B.S. Bhatnagar, his teacher, remembers him as a bright student, a good debater and public speaker, and a keen sportsman.
“Right from the beginning, he had his own mind and wouldn’t tolerate any nonsense," said Bhatnagar. “He was a stickler for the rules, very disciplined and considerate in expressing opinion. Teenagers will always play pranks, but he never did any of that."
According to Bhatnagar, Rai later became a prefect and was influential among his peers. In the summer, the entire school would decamp to the hills for 15 days, he said. “Staff and students, we would trek the whole way, sleep outside, and cook our own meals. There would be conscientious objectors, boys saying, ‘Sir, what’s this? We can’t do it,’ and (Rai) would coax them along," Bhatnagar added.
One of Rai’s classmates, retired colonel Brijraj Singh, who later served in the National Technical Research Organisation intelligence agency, remembered the young Rai having a superior command of spoken English.
“Vinod was very focused," said Singh. “He was the school cricket captain. We were nationalists at school—Vinod was not a very die-hard, principled person. But he would not bend."
At Birla School, Rai was two classes senior to former army chief general V.K. Singh, who had a bitter feud with the government over the question of his age last year.
After school, Rai attended Hindu College, University of Delhi, and the Delhi School of Economics where he was one of Prime Minister Manmohan Singh’s students. He was among the unusually successful 1972 batch of the IAS, alongside current governor of the Reserve Bank of India D. Subbarao, central vigilance commissioner Pradeep Kumar, former agriculture secretary T. Nanda Kumar, former home secretary G.K. Pillai, former secretary of the Planning Commission Sudha Pillai, and current electricity regulator Pramod Deo, to name a few. His first posting was to Kohima in Nagaland.
In Nagaland, according to the IAS officer from Kerala, Rai showed signs of unusual independence, given his youth and inexperience. “Once, when he was still a trainee with no powers, he single-handedly retrieved the dead body of his district collector, who had been killed by militants," the officer said. “The body had been left in an isolated part of the area and no one was willing to go and collect it for fear of their lives. So he just called over a government driver and asked him to drive without giving him any destination. It was only midway, where the road forked, that he told the driver to turn in the direction of the place where the body had been dumped. It was an act of extreme courage, considering the risk involved."
Rai then moved to the Kerala cadre of the IAS, where his most significant field posting was in Thrissur as district collector. The Hindu Business Line cited his recollections of his time there when he paid a visit to the town in 2010: “I landed at the Thrissur railway station burdened by a steel trunk, a bedroll and a tennis racquet, over 30 years ago," the article quoted Rai as saying. “When I departed after my stint as district collector, I had acquired a wife...three children (and) household articles to fill more than a truck."
He quickly learned the Malayalam language, said Bhatnagar, who was by then working in a school in Ooty, where Rai would send his son.
After Rai’s wife died from complications due to asthma in 1990, he married Geeta, the widow of a colleague who had also died young, and a mother of two.
“Sometimes second families do not get on very well," said Bhatnagar, who along with his wife was an occasional visitor to the Rais’ house. “But that is not what happened there; it’s a very well-knit family."
The IAS officer cited above said: “Rai was well liked across the political class in Kerala. He was considered close to former Congress chief minister K. Karunakaran, but when the Left came to power, he was equally regarded by them as well."
The officer likened Rai’s style to that of an orchestra conductor. “Frankly, he was the one bureaucrat everyone wanted to work with. This was because of his non-confrontational nature. He would try to resolve issues through dialogue," the officer said.
The IAS officer said Rai would take responsibility for errors that were not his fault, interceding to protect junior colleagues.
Later, Rai was moved to the department of financial services in the Union finance ministry, where a colleague who worked with him for four years agreed with his Kerala colleague’s description. “He is straightforward, upright, decisive and will stand by you as a fellow officer in difficult situations," he said.
Following his retirement from the IAS in 2008, Rai was appointed comptroller and auditor general with the backing of current finance minister P. Chidambaram. His reputation as a proactive and hawkish auditor began to grow.
“Earlier, the CAG was mainly concerned with auditing the implementation of government contracts that were awarded. Rai began auditing the processes leading up to the award of the contract or licence even before it had been implemented," said Amitabha Mukhopadhyay, a former director general in the office of CAG and its media adviser for a short while in 2008-09. “He was not too bothered with petty corruption. He wanted to go after the big fish."
In November 2010, CAG released the first of a series of audit reports that would make headlines, looking into one such process: the allocation of 2G telecom spectrum. CAG estimated the presumptive revenue loss to the government incurred by the telecom ministry at ₹ 1.76 trillion, a sum that became the subject of controversy.
Critics in the government, and especially in the telecom ministry, challenged the notion of a presumptive loss in an audit report, as well as the accuracy of the amount and the methods of calculation. But CAG had succeeded in gaining the attention of the national media.
It wasn’t just the government that complained about the 2G report. In September 2011, Mint first reported that R.P. Singh, who headed the CAG team that audited the 2G spectrum allocation, did not have a hand in compiling the final report. Instead, he was asked to sign off on a report prepared by CAG headquarters, Mint said, citing internal CAG documents. Singh’s own loss estimate had been much smaller. Later, in November last year, Singh publicly denounced his boss for overstepping his mandate and told journalists that he had been forced to sign the report with the presumptive loss figure in it, maintaining that he had never put the figure of 1.76 trillion in his draft report.
When contacted by Mint, Singh declined to comment on Rai or the internal working of CAG.
Others said putting a number to the loss was problematic.
“I would not like to use the word ‘presumptive loss’ in my report. To predict the future is not my job," said a former CAG official, who has since moved to the private sector. “You cannot arrive at figures unless you have rock-solid data to fall back on. On what basis have you calculated the loss? Even if it means that there has been a loss to the exchequer, the auditor cannot question the government’s policy decision."
The official further said that Rai altered his terminology for the 2012 report on coal block allocations: “I think he later realized that he had overshot his brief in questioning government policy and did not use the term ‘presumptive loss’ in the coal report, instead using ‘windfall gains’. He would have realized that he had created a stage where CAG reports were being taken seriously. He has put the CAG on the map of India."
Rai has energetically denied that there is anything out of the ordinary about his use of the terms “potential", “presumptive" or “windfall gains". In his deposition before the joint parliamentary committee on the 2G allocation, he pointed out that the term had been used several times in past audit reports, including those prepared by R.P. Singh himself. His office provided Mint with documents supporting that claim.
Nevertheless, the question of whether CAG overstepped its mandate in the report has occupied plenty of column space and airtime since 2010. Rai maintains that he is accountable to the people of India and its Constitution, and not to the government. Rai’s oath of office pledged “allegiance to the Constitution of India as by law established".
In October 2012, the Supreme Court weighed in on the debate, confirming Rai’s constitutional authority to “examine the revenue allocation and matters relating to the economy", and pronouncing that “CAG is not a munim (accountant)", while dismissing a plea challenging CAG’s power to conduct performance audit of controversial allocation of coal blocks by the United Progressive Alliance government.
Earlier, in a 2011 report that looked into the lapses in conducting the 2010 Commonwealth Games in Delhi, former comptroller and auditor general V.K. Shunglu had recommended that CAG should be made a multi-member body on the lines of the Election Commission. Nothing has come of this recommendation since. As the comptroller and auditor general in 2001, Shunglu had himself resisted the same proposal, when a panel to review the working of the Constitution, under former chief justice of India M.N. Venkatachaliah, had made the same recommendation. Shunglu’s own opposition had effectively stalled the move then.
The 2G report was not the first time the auditor’s office has been in the limelight. “In 1948, when the so-called jeep scandal broke, the then speaker of the Lower House disallowed any criticism of the auditor, even (prime minister Jawaharlal) Nehru agreed with this view," said Mukhopadhyay, referring to the purchase of army jeeps from the UK shortly after independence. V.K. Krishna Menon, the then Indian high commissioner to London, was accused of bypassing protocol and signing a deal with a foreign firm to acquire 2,000 jeeps for the army, out of which only 155 eventually landed in India. The issue was raised in Parliament after it found mention in an audit report. The government closed the case in 1955.
In 1952, then comptroller and auditor general V. Narahari Rao criticized the government when the Companies Act was being formulated.
“Rao deposed before the public accounts committee (PAC) that the formation of private companies under the Act for the management of government industrial undertakings from the consolidated fund would be a fraud on the regulation, as money from the fund could not be taken for forming private limited companies," he said. “Following this, section 619B was instituted in the Act (passed in 1956), which mandates commercial audit for all government owned and funded companies, by the CAG and auditors to be appointed by the CAG."
Gyan Prakash, who was comptroller and auditor general in 1978, challenged Jyoti Basu, then chief minister of West Bengal, to allow an audit of state government accounts, threatening to freeze them if he did not comply. Basu was forced to comply.
But perhaps the most significant CAG finding before Rai’s tenure came in the late 1980s. The report on the purchase of Bofors guns by comptroller and auditor general T.N. Chaturvedi eventually led to the defeat of Rajiv Gandhi’s Congress government. It so happens that R.P. Singh was director, audit, for the Bofors report.
Chaturvedi said his investigations were hindered by government departments in the days before transparency was mandated by the RTI Act.
“We began looking into the Bofors deal as a routine exercise," he said. “After we got the first set of papers, our officers detected something wrong with the Bofors deal. We requested for more papers and, although they were promised, the defence ministry dithered. There was a degree of reluctance in giving us the papers. The pressure was on me, from very senior levels in the government, including officials from the Prime Minister’s Office, to delay the report and to dilute it. By this time, the media was on the case."
Chaturvedi gives Rai full credit for his reports. “We cannot take anything away from what he has done as the CAG. It is true that he benefited from decisions that had been taken by his predecessors, but that is normal," Chaturvedi said.
He also defended Rai against the accusation by senior Congress leader Digvijay Singh that CAG has political ambitions, according to media reports. Singh likened Rai to Chaturvedi, who joined the opposition Bharatiya Janata Party after he left office.
Rai has a quiet existence commuting from his home on Kushak Road to his office behind a heavy wooden door in a large building near Connaught Place with heavy security. He plays tennis, watches cricket and polo, and manages to stay mostly out of the limelight.
Rai’s refusal to be swayed by pressure from above is a matter of pride within the organization, according to B.S. Chauhan, the current media adviser to CAG who previously worked in the finance ministry.
“The CAGs before Rai were resented by the people in the organization as they came in from the outside," Chauhan said, referring to the custom of installing an IAS officer as the head of an organization staffed by audit service officers. “Rai, however, is literally worshipped."
Mukhopadhyay said Rai’s most powerful ally has been the media, which has been assiduously cultivated, even though interview requests are routinely denied. “He believed the media was an important constituency," he said. “He brought in a media adviser (Chauhan) from the Indian Information Service and did not believe that there was any breach of parliamentary privilege in interacting with the media."
As mandated by CAG guidelines, Rai holds a press conference at 5pm on the day he releases any report to Parliament. He has overseen the creation of concise booklets on his various reports that he refers to as “Noddy" books and has drawn tongue-in-cheek comparisons between CAG reports and the works of Enid Blyton (the creator of the character). Apart from not giving interviews, Rai also has a reputation for being unusually approachable.
Although several commentators within and outside the government vouched for Rai’s personal integrity, some questions were raised about one high-profile appointment made under his watch in 2007, when he was heading the financial services department. At the time, Atul Kumar Rai, an Indian Economic Service officer, was appointed managing director of IFCI Ltd.
In response to allegations that came up in parliamentary committee hearings in 2010 that the appointment had been rushed through, Rai has always denied he was related in any manner to the officer. In December 2011, a parliamentary panel recommended a probe into Atul Kumar Rai’s appointment by the Central Bureau of Investigation.
“The committee...is quite amazed to see the swiftness with which the file moved among the ‘higher-ups’ in the department," the panel noted in its report. “All the vital decisions, including the views of the secretary of the other department and approval of the then finance minister, were taken between 30 May and 1 June 2007." Atul Kumar Rai was not removed from his position and he remains IFCI managing director.
With retirement a few weeks away, the question of whether Rai might join politics keeps popping up, especially since the next general election is due in 2014.
He has the requisite charisma, according to colleagues.
“When Rai was the secretary to the department of financial services, I often used to see him depose before the PAC," said Mukhopadhyay, who was appointed Rai’s media adviser shortly after he took over as the comptroller and auditor general. “He was a little bit of a cocky fellow. He was upright in his approach before the PAC and was not submissive."
Rai himself has been non-committal about entering politics, refusing to answer the question when it was put to him at a conclave hosted by India Today in March. “If I deny it, you won’t believe me," he said. “I’d best leave it to time to decide what I do. At present and, indeed in my entire career, I’ve been totally apolitical. I hope to continue in the same fashion."