SNAKES AND LADDERS

 

In November 2010, the Comptroller and Auditor General (CAG) submitted its performance audit report on “issue of licences and allocation of spectrum”. Interestingly, this was the third CAG report in 10 years. The last one, titled “review of collection and accounting of licence fee and spectrum charges from the licensees”, was submitted just two years earlier. 

 

Normally, CAG should not have been reviewing the grant of spectrum and the issue of licence — a policy issue. As its surprising public admission goes, it was in response to demands for a probe into allegations of corruption in the way “ineligible applicants were granted licence”, at prices far below the market rate, that it began reviewing the entire process of issuing licence, award of spectrum and implementation of the Unified Access Services (UAS). This decision of a constitutional body to respond to a public demand for probe into a policy issue was rather unusual. Never before had the CAG conducted a performance audit of this nature — clearly, a path-breaking foray not only into policy-implementation, but also into the realm of policy-making, which is the preserve of the government. 

 

This proactivism has been questioned even by Prime Minister Manmohan Singh who wondered why CAG probed a government policy. CAG Vinod Rai hit back at suggestions that he went beyond his constitutional mandate in auditing the telecom sector by claiming that a 2006 letter of the finance ministry gave the CAG the freedom to conduct performance audit with an unfettered access to records. 

 

While there could be considerable merit in the reasons that made the spectrum probe necessary, it is unusual for the CAG to behave like a parliamentary committee in the choice of its subjects. So whatever may be CAG Rai’s defence, it’s not in its mandate to look into design of policy, or how a cabinet minister makes a decision. 

 

In fact, a quick look at all the performance audit reports of various departments and ministries on CAG’s website would show the limited manner in which the auditors tested the government entities on “economy, efficiency and effectiveness”. What stands out is the spectrum case — here the audit is so ambitious that the auditor has got access even to the correspondence between the prime minister and former minister of communication and IT, A Raja. Surely, the PMO had found nothing improper in CAG’s demands then. 

 

CAG has also raised questions about policy decisions regarding first-cum-first-served issuing of licences and the low entry fee. Even the resale of licences to foreign buyers — legally correct at that time — was subsequently challenged by the CAG. And then there was the dramatic claim by the auditors that the country had lost Rs 1.75 lakh crore in the sale of licences — a claim trashed by the present Telecom Minister Kapil Sibal. 

 

The moot question is, why did the CAG get into an area where it had not treaded before? When CAG Rai had earlier retired as finance secretary, never in his long career had he come close to doing anything so dramatic. Privileged sources claimed to Hardnews that he was discretely instructed from the highest level to conduct this review. Rai, these sources claim, is a conservative bureaucrat who would not have pushed the envelope without a go-ahead. Although the prime minister has been critical of the CAG, there are a number of indications that this go-ahead may have come from his office itself.

 

Besides showing the prime minister as someone who had resisted the spectrum sale, the CAG report also cleverly buffers him and the then finance minister P Chidambaram from the disgraced telecom minister’s decisions. Raja is presented as a rogue who steamrolled everyone else in the cabinet, including the prime minister, to have his way. Indeed, Manmohan Singh has rued about ‘coalition compulsions’ behind much of the wrongdoing in the government.

 

What is also clear is the manner in which the report overlooks simple rules of business that should govern relations between the prime minister and other ministers. If CAG could be critical of the telecom minister’s conduct, what stopped him from asking why the prime minister failed to halt the spectrum sale at various stages? Moreover, the report says nothing about how the telecom minister could have his way even after the prime minister, the finance minister and law minister had repeatedly raised objections against it.

 

Indeed, despite acknowledging it as a first-class performance audit report, it is possible to raise troubling questions about its objectivity. These inferences reflect how gargantuan corruption scandals are wrecking the UPA government, allowing entities like the CAG to reinterpret their mandate. 

 

The courts, too, have sensed the weakness inherent in the UPA government and gone about usurping the role of the executive. Questions are being raised in informed quarters whether monitoring of the 2G scam was taken up by the Supreme Court bench of its own volition, or at the behest of the prime minister? The apex court was severe in its criticism of the prime minister in the early days of its monitoring, only to backtrack later. Subsequently, it castigated former telecom minister A Raja for the “tenor” of his letter to the prime minister. 

 

In normal times, any prime minister would have acted against a cabinet colleague if he/she had crossed the line or misbehaved, but in a coalition government, stability took precedence over the individual conduct of ministers. The Congress leadership made it clear that they had to accommodate their allies’ eccentricities. But this assertion is only partially true. In fact, many policy decisions with major financial implications, involving ministries held by coalition partners, had an easy passage with the UPA leadership as the corporate beneficiaries of these deals had no party affiliation. 

 

Erosion of the government’s authority is one outcome of the 2G scam — its monitoring has seen former ministers and other politicians, bureaucrats and businessmen go to jail for manifest bribery and corruption. This is setting new precedents. The government looks helpless even as courts keep encroaching upon its jurisdiction. 

 

Take the recent black money case, for instance. In a path-breaking judgement, the bench of Justices B Sudershan Reddy and SS Nijjar has ordered the constitution of a Special Investigating Team (SIT) that would report directly to the apex court. It directed all the government enforcement agencies, plus Research and Analysis Wing (R&AW), to report to the former Supreme Court judge who would head the SIT. 

 

This extreme judicial reaction, however, was due to the agencies’ prior lethargy in probing the finances of mysterious Hawala dealer Hasan Ali Khan (deposit receipts worth $8.4 billion of Swiss-based UBS bank were found in his house). The bench wanted to find out why there was no custodial interrogation of Khan. Enforcement agencies, in their preliminary report, had claimed that Khan was parking monies on behalf of sundry politicians, businessmen, arms dealers etc. 

 

The SIT’s brief, therefore, is to look into Khan’s links as well as find out who all had squirreled away their funds in safe havens. Interestingly, the court was critical of neoliberal economic policies in India, holding them responsible for much of the naked promiscuity in money-making. 

 

The government, on its part, has sought to challenge the apex court’s black money order. It remains to be seen whether it would show enough determination to reset the terms of discourse between the executive and the judiciary — under severe test in recent times because of institutional infirmities.