http://www.thehindubusinessline.com/opinion/for-a-new-governance-agenda/article5963169.ece?homepage=true
A shift towards fiscal discipline and more power to the CAG would be welcome
A shift towards fiscal discipline and more power to the CAG would be welcome
The prime concern of the electorate
is good governance. This involves functioning of constitutional
institutions and offices, accountability to the public and transparency
in governance.
Specific reforms are needed to
overcome existing problems. A reform worth looking at is to restrict the
selection of the Prime Minister to the Lok Sabha. This will require an
amendment to the Constitution.
However, this can be
achieved by evolving a convention. In Britain, which lacks a written
Constitution, the century-old convention is to have the PM only from the
House of Commons and not the House of Lords.
The
Parliament’s functioning is eroded by promulgation of ordinances. The
ordinance route can be adopted only if the conditions prescribed in the
Constitution are met.
Enhance CAG’s scope
A
pivotal office under the Constitution of India is that of the
Comptroller and Auditor General of India (CAG). Parliament is
accountable to the public for ensuring that public money is raised and
spent properly. The CAG plays a crucial role in assisting Parliament in
this area. He has a wide mandate covering the gamut of revenue and
expenditure.
Performance audit reports on schemes
and projects must go beyond financial audit. Regrettably, the government
tends to take a narrow and negative view of his audit as mere financial
audit.
It is time the government took note of the wider role of the CAG to ensure financial accountability.
There
are two areas where the CAG’s role can be expanded. Public sector banks
continue to be outside the purview of the CAG, according to the Bank
Nationalisation Act. The Act has to be amended to make CAG review
possible.
The other area for widening the CAG’s audit
is public private partnerships (PPPs), involving audit of initial
records of private companies in PPPs. The April 18 Supreme Court ruling
enables the CAG to audit the accounts of telecom companies which share
revenues with the government for using spectrum. This has a far-reaching
impact across such sectors as power, mining and roadways, where PPPs
are in force and companies share revenue with the government.
Fiscal discipline
Fiscal
prudence in raising funds and spending is another key issue. Corrective
steps need to be taken to keep the fiscal deficit in check, as this
impacts growth and inflation.
The Constitution left
it to Parliament to fix public debt limits. In 2003, the Fiscal
Responsibility and Budget Management Act was passed. Ten years after the
Act, the specified fiscal deficit target has not been achieved.
More
alarming is the casual approach to this historic legislation. The focus
is only on the extent to which the deficit has been reduced, and not by
what means. The deficit number itself may be the result of
understatement or postponement of expenditure.
Effective
deficit reduction requires a fundamental review of all the revenue and
expenditure items in the Budget and rationalisation to control inflation
and promote economic growth.
Two issues deserve
special mention. No action has been taken on the retrieval of black
money stashed abroad. This has drawn strictures from the Supreme Court.
The other issue is corruption at all levels of government and delays in
dealing with them, that have come in for criticism by the Court. The
implementation of the Prevention of Corruption Act has to be tightened
and the public kept aware of action taken.
The
government should publish action taken on individual items of revenue
and expenditure. It should also throw light on how it fixes deficit
targets — in consultations with the Reserve Bank of India and the State
governments in this regard.
Transparency in
appointment to crucial positions such as the CAG and the RBI Governor is
essential for good governance and instilling public confidence.
No comments:
Post a Comment