Former Prime Minister of India - Shri Atal Bihari Vajpayee

PM's inaugural speech at XXIInd Conference of Accountants General

~It gives me great pleasure to be with you here today.

Public Audit in India has played a key role in improving the accountability of the executive to the Legislature and in strengthening and deepening our democratic form of Government. By focussing on specific instances of waste and mismanagement as well as on Government programmes that fail to deliver the desired results, Public Audit contributes to the improvement of public policy and delivery of public services.

However, Public Audit also faces the challenges of change. This has become inevitable owing to the reform programme of the Central and State Governments. The role of the Government has been changing from that of a controller and executor of socio-economic activities to that of a policy-maker, facilitator, motivator, and direction-setter. Our main emphasis now is to unleash the potential for private enterprise and encourage the constructive participation of the institutions of civil society.

Governments in the era of reforms are expected to do less in the economic sphere; but they are also expected to ensure that more is got done. This does not in the least reduce the importance of the principle of accountability in Government. The executive has a Constitutional duty and a moral obligation to see to it that every rupee at its disposal is well spent and for the purposes for which it is allocated. Thus, the executive is accountable not only for how much has been spent and under what heads, but what the expenditure has actually achieved.

One of the shortcomings in our governmental system is that the evaluation of our policies and programmes is often spending-based, and not sufficiently based on outputs and outcomes. This must change. We must remember that the people have become more demanding vis-à-vis the performance of the governments they elect. Therefore, I urge the office of the CAG to sharpen its focus on what has been achieved with what has been spent.

I am aware that a lot of good work done by the CAG is still awaiting examination by the Legislative Committees. Inadequate follow-up action on audit reports presented to Parliament and State Legislatures is a matter of concern. I have been the Chairman of the Public Accounts Committee of the Parliament and I know that the task before the Public Accounts Committee and the Committee on Public Undertakings is a difficult one. The difficulty that arises from overload can be tackled by transferring matters of administrative and organisational nature to the Departmental Standing Committees, so that the Public Accounts Committee and the Committee on Public Undertakings can concentrate on more important areas requiring greater attention. In fact, I had suggested this while inaugurating the last Conference. I am sure the Committees are seized of the matter.

In the meantime, I would suggest that the CAG could consider a compliance mechanism within his department. Such compliance audit would be a productive exercise given the poor state of response to many important audit findings. This would also contribute meaningfully to the efforts of legislative committees in coping with the burden of expanding accountability concerns.

I know that the tasks of the Committees are increasingly getting more difficult due to the complexities of the accountability structure. If an incorrect financial decision is taken or a particular activity of Government leads to loss or wastage it becomes extremely difficult to locate where exactly what went wrong or who was responsible, due to a network of interdependent systems and procedures. More responsibility centres with wider delegated powers are intended to speed up execution. But lack of accountability in the executive can subvert even the best of initiatives. This is also true of your own organization and you have to ensure that the methods and techniques you follow in your work compare with the best in the world.

In this context, I should also stress the fact that the executive departments of the Government are keen to respond to your practical and constructive suggestions. By design, CAG’s audit follows the event, though sometimes a little too late. Once the event is over and the executive has moved on to another time frame with a fresh set of goals there could be some hesitation to look back. But your observations should be such that they prompt the concerned department to look back for guidance and self-correction. You should also consider the overall circumstances in which the executive took a particular decision. When this happens, the CAG audit will not be seen as a fault-finding exercise, but as a useful mechanism for correction and reconstruction.

It is heartening that the Audit Reports of the CAG are now engaging wider public attention. While inaugurating the last Conference I had suggested that for wider dissemination of the audit findings you should make available your Reports in Hindi as well, on your website. I am happy that you have not only done that but also have gone a step further by issuing some of your Reports in selected States in their respective languages. Administrative Departments of the Government should now come a step forward and append major audit findings and action taken thereon to their Administrative Reports in English, Hindi or other languages as appropriate. This would further deepen the accountability process by informing and advising the silent, yet the most powerful stakeholders of Government and enhance transparency.

I have often heard civil servants – especially those who have retired from service – say that, while our system has many legitimate checks and balances to ensure accountability, it does not leave enough scope for individual initiative. They complain that the system has in-built disincentives for taking decisions. The job of the executive is to execute the policies and programmes of the Government. To execute, one has to take decisions – promptly and in view of the overall objective to be achieved. But senior officers, whose duty it is to take decisions and produce results, are often afraid of possible audit remarks and shy away from taking commercial decisions in a timely manner. Instead, they play it safe, preferring to take shelter under procedures and technicalities.

Thus, the executive becomes a prisoner of procedures, rather than an achiever of purpose. An atmosphere in which the auditor is on the offensive and the executive is on the defensive is detrimental to good performance. In the absence of timely decisions, projects and programmes become victims of unacceptable time and cost overruns. You will agree that this, too, is as much a violation of the principle of accountability as any act of financial irregularity.

This matter has assumed great significance lately especially in view of the growing competition between government-owned enterprises and their private sector counterparts. Even when the area of business is the same, there is a non-level playing field between the two insofar as the powers vested with their executives are concerned. Clearly, the time has come to take a serious re-look at the accountability framework within which government-owned enterprises and senior officers in the Government operate. The system has to empower and trust our executives if they have to become dynamic and produce best possible results. This requires a change in the mindset of auditors, since they too are a part of this system, and not outside it. Our overall objective should be to enhance – indeed, substantially enhance – the delivery capability of our democratic system, so the pace of India’s all-round development is accelerated and the legitimate aspirations of our people are fulfilled. I seek your active cooperation in effecting this change.

I am glad to note that CAG has established the institutional framework for auditing the panchayat raj institutions and urban local bodies where a sizeable chunk of resources are deployed. All of us should ensure that grass-root level democracy not only succeeds in form, but it also delivers in full measure the goals set for it.

‘Integrity’ and ‘Reliability’ are the core values that have helped the CAG gain all-round credibility. The global community also reposes confidence in you in bids for international audit. You have benchmarked yourself with the best and I compliment all those working in the system, who have made it possible.

I greet you and convey through you my greetings to all the officers and employees of the Indian Audit and Accounts Department. I know they are discharging a difficult function at a critical time, but with a passion for excellence that should be the hallmark of every governmental institution.

With these words, I inaugurate the Twenty Second Conference of the Accountants General and wish you success in your deliberations.

Thank you~.