Accounts and accountability

Synergy between the CAG and government can ensure better delivery

Can the CAG's audits be used to improve governance? Is there a need to facilitate more effective communication between the CAG's office and the executive, to bring in mid-course corrections, improve programme execution and service delivery via the authenticated audit critique?

The Union minister for rural development, Jairam Ramesh, believes so. According to reports, he has said that expenditure on all rural development flagship programmes will be brought under the CAG's office for greater accountability and transparency in implementation, plugging the alleged leakage of funds meant for the NREGA and rural road works. The Centre has earmarked Rs 1 lakh crore for rural development this fiscal under its flagship programmes.

There can be synergy when there is synthesis in the way governance and audit functions are conceptualised. The smooth functioning of any parliamentary democracy depends on balancing the divergent roles and responsibilities of its three pillars, the legislature, the executive and the judiciary, along with credible institutions like the office of the CAG.

In the last budget, the total plan expenditure for 10 flagship programmes for 2012-13 was raised to Rs 5,21,025 crore, 18 per cent more than the previous budget estimate. These programmes are intended to make growth inclusive, while showcasing India Inc. The Bharat Nirman initiative has components for rural infrastructure, encompassing electrification, telephony, roads, housing, drinking water and irrigation, while other programmes, like the mid-day meal scheme, the NREGA, Indira Awaas Yojana, the JNNURM and Sarva Shiksha Abhiyan, are tailored to provide a better quality of life and livelihood security.

Considering the need to measure outcomes in order to assess the impact of such schemes, the focus shifted from outlays to outcome budgeting from 2005-06, with an emphasis on targets, quantifiable deliverables, physical outputs and institutional reforms in the delivery systems of these programmes. A medium-term expenditure framework statement has also been introduced in the Fiscal Responsibility and Budget Management Act, 2003, to facilitate the optimum allocation of resources for prioritised schemes and weed out those that have outlived their utility.

Even if the leakage of development funds is not as high as 85 per cent of the total allocation, as estimated by former prime minister Rajiv Gandhi, it does exist. Realising that good governance is essential for sustainable and inclusive development, the Central government has adopted "citizen's charter" initiatives to bring greater transparency, accountability and responsiveness to administration. The concept is based on trust and cooperation between the service provider and its users, adapted from the United Kingdom, which introduced it in 1991 and re-launched it in 1998, emphasising "services first" to continuously improve the quality of public services by empowering citizens.

Public money should be spent while ensuring the accountability of individuals and organisations, and in compliance with applicable acts and regulations to enhance service delivery. The nine essential components of service delivery are: settled standards of service; the right to full information, consultation and involvement; encouraging access; the promotion of choice; fair treatment; putting things right when they go wrong; the effective use of resources; innovation; collaboration with other providers.

One of the more rational approaches before the government for the purpose of reducing the common man's alienation from the state, and restoring his faith in the state's capacity to design citizen-centric development programmes, is to ensure effective implementation with timely monitoring and mid-course corrections and, if needed, policy interventions.

The office of the CAG is constitutionally mandated to ensure that the people's representatives oversee public expenditure, promoting accountability and good governance. High-quality auditing can provide valuable quantitative and qualitative inputs for formulating effective policy interventions. Learning from the root cause analytics of an effective audit may help promote accountability.

An outcome-oriented, competent audit appreciates that the commitment of the executive is a prerequisite. Intensified communicdation between the CAG and the government machinery could help the executive find valuable inputs from objective, authenticated audits of the performance of different projects. This could, in turn, enhance the CAG audit and its capability to provide an independent assurance to stakeholders. India's post-liberalisation growth story was relatively unscathed by the global recession because of impressive policy initiatives, the benefits of which must reach all Indians.

The writer is director-general in the office of the CAG.

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