Former Prime Minister of India - Shri Atal Bihari Vajpayee

PRIME MINISTER'S SPEECH AT THE 21st CONFERENCE OF ACCOUNTANTS GENERAL

Following is the text of the speech of the Prime Minister, Shri Atal Bihari Vajpayee, at the 21st Conference of Accountants General, here today:

“I am happy to be with all of you this evening at the 21st Conference of Accountants General. I recall with pleasure my inaugurating your last Conference two years ago.

The Accountants General at the States and the Comptroller and Auditor General at the Centre have a very important role to play in our democracy. You are the watchdog of accountability as far as Government finances are concerned. It is your duty to check that the revenues due to the Government as per law have been duly collected, and that the amounts collected have been spent properly by the Executive. That is why, our founding fathers have given a separate role for you in our Constitution.

The need for accountability has increased — and not decreased — with the onset of economic reforms. Globalization and liberalization have characterized our economy in recent years. These have been necessitated by the present day realities.

It is important to remember that the process of reforms has not reduced the role of the Government in economic decision making. The Government is now expected to play the role of a promoter and a facilitator of economic progress, while not being directly involved in economic activities. However, this change does not in any way diminish the importance of transparency and accountability, which are the life-breath of a democracy.

It is also important to remember that the process of economic reforms has not reduced the role of the Government in social sector development. Indeed, both the Centre and the States will have to continue to play a critical role in making education, health-care, drinking water, housing, and other basic amenities available to all our citizens, especially to the poor and the underprivileged.

Each year we allocate substantial resources for these sectors. We are committed to increase these allocations in the future to remove all the social and regional imbalances. However, the leakage of public funds at the implementation level continues to be a matter of grave concern. Corruption is the biggest enemy of development. I wish to emphasize our Government’s commitment to fighting corruption and ensuring probity in administration and in public life.

As all of us know, the aspirations of the Indian people are growing. Their expectations from the Government are on the rise. It is, therefore, necessary to ensure that our scarce public resources are well spent and that they produce the desired results. This places a tremendous responsibility on every organ of the State to be transparent and effective. Hence, the CAG and the Accountants General will have to continue to play their watchdog role energetically.

In this era of great changes, both the political leadership and the bureaucracy should keep abreast of new technologies, new management practices, new methods and new attitudes to enhance productivity. I would like to make a special mention here of information technology. Your last conference had mandated an information technology programme in the States. This would ensure faster and more accurate compilation of accounts.

I compliment the Indian Audit and Accounts Department for completing the computerization of accounts of the State Governments. This will give more accurate scheme-wise figures of expenditure, which should result in superior financial management and budget preparation in the States.

By placing your reports on the Internet, which makes it available for all, you have increased transparency. I would, however, request you to quickly make available your reports in Hindi as well on your website, so that many more people will be able to understand and use this information. Your reports on different departments and ministries should be read by all interested people. Therefore, I suggest that in future, the annual reports of every department and ministry, must carry the CAG’s report for that department or ministry, even if it is for the previous year.

With the spread of information technology, government organizations will depend more and more on computer systems. The checks and balances that were institutionalized over many years will make way for new system controls. The adequacy and operation of these controls will, therefore, be a matter of great concern. Any compromises in this regard could severely jeopardize public finances. As auditors, it is your duty to check these controls and provide an assurance that they will work satisfactorily. I am sure that all of you will live up to this challenge.

The Government is committed to greater fiscal responsibility and is determined to contain public debt and budgetary deficits. The comprehensive coverage of Government revenues and spending in the CAG’s audit reports is a source of information for the Government as well as the Public Accounts Committee. As the Chairman of the Public Accounts Committee twice, I always evinced great interest in the performance audit reviews prepared by the Comptroller and Auditor General of India.

However, the PAC does not have the time to examine the reports of every ministry and every department. Every year, it takes up for examination only a few chosen ministries. The remaining are deferred. This is not an efficient system, since many reports are ignored. One way to remedy this defect is that the CAG’s report of every Ministry be sent to the Parliamentary standing committee of that Ministry, for a preliminary scrutiny. This will have the advantages of ensuring that every Ministry’s CAG report is examined, and that too, by those who have some understanding of the workings of that Ministry.

The effectiveness of the Audit Reports that have been so painstakingly prepared by your dedicated department lies in their timely examination by the Public Accounts Committee in the Centre and the States. However, in many States there are substantial delays in taking the audit reports for discussion, not to mention taking timely follow-up action on them. In this regard, progress in certain States has been particularly disappointing. I urge all States to quickly take up these reports, so that the Legislature can do its proper role in supervising the Executive.

I would like you all to further sharpen your skills and make relevant and practicable recommendations for conserving resources without curtailing our development effort.

Disinvestment of PSUs has brought about a new situation with regard to accounting. An issue that needs debate is the nature of the accountability mechanism to be established for companies transferred to private management but where Government continues to hold a substantial financial stake. While some control may be necessary in such cases, it should not act as a detriment to the entrepreneurial initiative of the management. The Government will welcome suggestions from you in this regard.

Another feature of our reforms is the greater reliance on independent regulatory authorities instead of direct intervention by Government. While the effectiveness of these regulatory authorities requires independence in their functioning, their accountability to the legislative needs to be ensured. You will need to devise appropriate norms and methods to audit the regulatory authorities, where these audits are entrusted to you.

Another area of concern is how to strengthen our Panchayat Raj Institutions and Urban Local Bodies. The Eleventh Finance Commission has made extensive recommendations on increasing their financial resources. The Commission has also made some suggestions to strengthen their accounting system and auditing arrangement.

Their recommendations have been accepted by the Government of India. These have given the Comptroller and Auditor General of India an important role in strengthening the accounting system of lakhs of our Panchayats and thousands of urban bodies and in conducting their audit. I am sure that your Department will devise an effective plan to do this.

Let me take this opportunity to ask the CAG and all the Accountants Generals to convey my personal greetings to the entire staff of the Indian Audit and Accounts Department. Please let them know that I value their skills, their integrity, and the dedication with which they work without fear or favour to ensure that Parliament and State Legislatures get a credible document of Government performance.

I am pleased to inaugurate the 21st Conference of Accountants General. I wish you the best in your endeavours.

Thank you.”