Where does the money go?

Money, money, money,’’ the music system in a neighbouring car blared out as I was stuck in a traffic jam, ‘‘Always sunny in the rich man’s world..’’

There was more to it but that is the bit which stuck. As news of the fractured Uttar Pradesh mandate poured in courtesy my radio, it seemed quite applicable. It is only a matter of time before the suitcase salesmen in Lucknow get busy. (If they haven’t already done so!)

It is money time in Delhi as well, with the Union finance minister opening his bag of tricks today. With recession gaping at us, he has to explain where the money is coming from. Here is an equally important question: where is the money going?

The Constitution says that it is the Parliament that supervises all expenditure. This is a joke; scoring political points takes up so much time that debating economics takes a back seat. Most ministries’ demands are simply cleared at a trot in the eleventh hour before the Budget Session ends.

Yet I am not sure Parliament has the tools to study these complex issues even if members had the time or the will. The United States Congress has a non-partisan, highly-trained staff to help senators and representatives decipher the intricate code making up a budget. There is nothing comparable in India and without such aides even the most conscientious Parliamentary committees are tied down.

In practice, the actual act of supervision falls to the Comptroller&Auditor General. Foreseeing the situation, the authors of the Constitution took care to spell out the range of his powers and to guard his independence of action. (These are given in Articles 148 through 152 of the Constitution.) So, on paper, the Indian Comptroller&Auditor General has greater powers than even his United States counterpart.

Take, for instance, the ongoing ‘Kargil Coffin Case’ controversy. Would anyone have heard about if not for the Comptroller&Auditor General? (I am not saying the castigation was justified, merely pointing out that a Comptroller&Auditor General has the powers to rebuke even the most powerful ministers if required.)

It is thus a matter of concern for all of us that the right man gets the job. But while everyone has an opinion on the selection of, say, a governor or members of the Election Commission, the Comptroller&Auditor General’s post barely figures as a blip on the radar of public consciousness. (How many readers can name even one of the nine men who have held the job?)

Sadly, there is a loophole in the shields that guard the Comptroller&Auditor General’s freedom. Rising from the ranks of the bureaucracy, will he bother to inspect a decision with which he himself was involved? That flaw meant at least two major deals were never inspected.

The first was the Jaguar deal struck during Jagjivan Ram’s tenure as defence minister in the Morarji Desai administration. The Comptroller&Auditor General appointed in 1978, Gian Prakash, came to that office having served as defence secretary. The defence ministry had taken up 49 paragraphs in the Comptroller&Auditor General’s report for the fiscal year 1976-77; it shrank to 37 paragraphs in Gian Prakash’s first year, and continued to drop after that.

I am not saying Gian Prakash himself was at fault in the Jaguar deal. But it wouldn’t have been human nature had Comptroller&Auditor General Gian Prakash chosen to re-examine decisions made during the tenure of Defence Secretary Gian Prakash!

The Congress(I), which had raised a ruckus over the Jaguar purchase, did not forget this lesson. Six years ago, when the Government of India needed to appoint a new Comptroller&Auditor General, the Prime Minister’s Office wrested the decision away from the Union finance minister.

Manmohan Singh, probably the man with the cleanest image in the Narasimha Rao ministry, recommended an IAS officer called Yuganthar. The Prime Minister’s Office, however, was adamant about appointing another IAS man, V.K. Shunglu. The finance minister gave way.

I still recall what another experienced bureaucrat told me at that time. ‘‘You will see that the most questionable deal struck by the Narasimha Rao government will never be scrutinised by the Comptroller&Auditor General.’’ He was referring to the sale of Maruti Udyog shares to Suzuki, and he was absolutely correct.

To refresh everyone’s memory, the Narasimha Rao government agreed to sell 5 per cent of Maruti Udyog to Suzuki, allowing the Japanese firm an equal voice in the firm with the Government of India. The price fixed was a scandalously low Rs 269 per share, and this was at a time when even Hindustan Motors was being quoted at Rs 200. For the record, Suzuki itself had earlier offered a higher price!

If memory serves me correctly, Narasimha Rao himself held the industry portfolio with Krishna Sahi as his deputy in the ministry. Neither has explained to this day how and why they agreed to sell out at such a price. More to the point as far as this column is concerned, the deal was never inspected by the Comptroller & Auditor General.

The decision seems to have been pushed through by the Prime Minister’s Office rather than by the Union ministry of industry. So Shunglu, who was serving in the latter when the deal was struck, probably had little say in the matter. But the Prime Minister’s Office seems to have calculated that he would be reluctant to delve too deeply into a ministry where he himself had recently held a high post. And so it proved.

The Jaguar purchase and the sale of Maruti lie in the past. Yet there have been dubious decisions made in the last four years, too, not just in the ministry of defence but also in, say, those of power and communications. An unbiased scrutiny is required, if only to clear the air.

A Comptroller&Auditor General is helpless to control the hire-purchase system being employed in Lucknow just now. But he has much to do in Delhi. I hope the prime minister, a former chairman of Parliament’s Public Accounts Committee, finds the right man for the job.

Earlier Columns