Vijayendra Nath Kaul joined the Indian Administrative Service in 1965 after securing a postgraduate degree in history from St Stephen’s College,Delhi.He was sent to the United Nations in 1991 and was adviser, trade policy for the Asia-Pacific region for UNESCAP in Bangkok for seven years. An expert in international trade and finance, he is a fellow of the World Bank’s Economic Development Institute and also external auditor of the Food and Agriculture Organization, the World Health Organization, the International Maritime Organization, and the World Tourism Organization. He has also been Secretary to the Government of India in the Ministries of Coal, Chemicals & Fertilizers, and Petroleum & Natural Gas. He is fond of bridge, tennis and golf. He is the current CAG.
gfiles: Where do we stand globally?
VN Kaul :We are much ahead of others in the world.Nobody in the world is as independent as we are.Our CAG is the most important and independent body in the world. Even in the US,the CAG is under Congress. In India, we are answerable to neither the executive nor Parliament.
gfiles: But don’t you have political pressures?
VNK: No.There are absolutely no political pressures. In the past five-and-a-half years,I have never ever been asked by any political person to do him a favour or yield to pressure.
gfiles: Do you have competent manpower?
VNK: If you are talking of competence in terms of knowledge then lack of knowledge is not a question.Sometimes it might happen. Criticism is there. But, by and large, our audit team is fairly competent compared to any other sim ilar organization in the world.
gfiles: I mean the level of technical know how of the personnel,technical competence…
VNK: We are adopting new technologies and gearing up for a complete IT audit system. In spite of a manual audit system,I would say manpower is not a constraint. We have the largest manpower in the world, with the exception of China.Our strength is 55,000. Though we have abolished 4,000 posts this year, I can still keep up to 72,000 people. Here, the question is not of manpower but of changing and improving the system.
gfiles: Are you shifting to double entry system?
VNK: Yes, accrual accounting is a fundamental change.We have inherited the cash accounting sys tem from the British. The system is simple – receive cash and do the expenditure with voucher entries. But the system is now inadequate and outdated.We are modernizing. The government is planning of Finance has to decide to implement the system.The road map is ready.The simplicity of the cash system is the main hurdle. The advantages of the accrual system have to be brought to the notice of the Central as well as the state governments. It is similar to commercial accounting.The cash system allows no long-term decisions.
gfiles: What is the cost of shifting from cash to accrual auditing?
VNK:The cost varies from state to state and organization to organization. The cost of training is important.We have to upgrade the system.It requires greater to shift to accrual accounting. We have constituted a board headed by the Deputy CAG to study, analyse and implement the new system. All the heads from railways to public sectors to financial commissioners of the state govern ments have been included in the board. Now the question is how the transition from cash to accrual accounting can cre ate a difference in our system.
As regards our performance, I must tell you that for every rupee incurred on audit, the recovery is 11 rupees. This proves our brilliant performance
gfiles: Why has it not been implemented for so long?
VNK :For the last five years,the accrual system is being discussed. The Ministry effort.It will amount to overhauling the entire present system.
gfiles: What are the advantages of the accrual system?
VNK:We will have a better comprehen sive physical system which will be more transparent than the existing one.
gfiles: What is the national opinion about it?
VNK: A period of education is required. Almost all the states have agreed to adopt the accrual system except one.Railways and the postal department are ahead of others. Civil accounts area is a problem.
gfiles: Sometimes you submit a report indi cating the anomalies of a department, state government or PSU. Then it is submitted to the Public Accounts Committee and to Parliament. But often the individuals named escape with impunity…
VNK: The response from the Central and state governments has to improve. It is a lengthy process. Sometimes we write just a paragraph and the state department or the concerned depart ment replies to it. The problem with the government is that its response is often dismal. I do not feel that our efforts go down the drain at the end of the day. Regardless of whether the government responds to or complies with our find ings, we are doing our job.
gfiles: But you are policing economic crime. Officers or individuals misappropriate crores of rupees – as pointed out in your various audited reports. But ultimately they succeed in saving their skin and the economic crime does not seem to carry weightage.
VNK: Yes,there is a need to improve.We have to value money.
gfiles: Don’t you think the CAG should have penalizing powers?
VNK: It already has a great deal of responsibility. Punishment is a judicial act. We do not want to dilute our role. If somebody has misappropriated government funds, the CAG says it publicly. As per the Constitution, any such talk would amount to undermining the role of the judiciary. Our role is well defined.
gfiles: There is a proposal that the CAG, CBI and CVC be allowed to work together so that financial mismanagement can be checked then and there.
VNK: What structure the government needs is a policy matter. I have no comments to offer. Corruption is a complex phenomenon pervading the wider spectrum. We send advisories to the government. We prepare audit guidelines.We send performance reports. The Secretaries of the government take note of our advisories – that is, our role.
gfiles: Times are changing, so is the technology. Are you adopting e-accounting?
VNK: We are fairly advanced in IT audit system.We have already conducted IT audits. Reports are there. Andhra Pradesh is far ahead of other states.We are developing skill but there is a cost factor involved.
gfiles: Every year, the Prime Minister announces flagship programmes like Jawahar Rozgar Yojna, Antyodaya Yojna, Indira Awas Yojna. Does their implementation live up to the expectations of the masses?
VNK: The CAG does performance audits. We are vigilant. Beneficiary surveys are done.We try to audit all the programmes as much as possible.Whenever a new scheme is announced, we write letters to the Deputy Chairman of the Planning Commission, informing him of the track record of past schemes.
gfiles: But does the flow of funds really go down to the common man?
VNK: It is very difficult to find the financial accessibility in the system. Figures sometimes do not depict the true picture. So we do the overall performance report.
Punishment is a judicial act. We do not want to dilute our role. If somebody has misappropriated government funds, the CAG says it publicly
gfiles: What is the expectation of the government from you and do you think you perform up to it? You spend Rs 714 crore.
VNK: Government expectation is very high. There is always an expectation unmet. As regards our performance, I must tell you that for every rupee incurred on audit, the recovery is 11 rupees. And this proves our brilliant performance.
gfiles: There are eight lakh companies registered with the Ministry of Corporate Governance. For the country’s financial health, the CAG should have a role to play in all these companies?
VNK: We have neither skill nor infrastructure nor the desire to involve ourselves. It’s not our role and we are not cut out for this.
gfiles: In almost all the Central ministries, IAS officers man the post of Financial Officer.Why are they not manned by officers from the Accounts and Audit Service?
VNK: It is not a question of this service or that service.But I would prefer skilled officers be appointed to these posts to sharpen and improve the quality of work.Officers should at least know how to read the balance sheets. I have already written to the government about it and it is up to it to take the decision
Editor, gfiles
