Mint to contractors, leftovers to citizens

The Comptroller and Auditor General of India is crying itself hoarse over avoidable expenses, unfruitful expenditure and undue favours to contractors. Is anyone listening?

Himanshu Upadhyaya Delhi

Devotees tossing coins into rivers from a bridge is a widespread ritual in India. If the Comptroller and Auditor General (CAG) of India is to be believed, the Indian exchequer does something similar: throwing coins copiously to contractors. It is no wonder that benefits from public projects and programmes do not trickle down to the citizenry.

Indian citizens pay government officials an astounding Rs 21,068 crore in petty bribes to get routine work done, according to a study by the Centre for Media Studies for Transparency International — a global watchdog organisation that tracks corruption in several countries. Yet, this is but one aspect of corruption.

A much bigger aspect is the outrageous ‘leaking’ of public finances in our country. Budgetary allocations for public finances increase every year but citizens derive very little benefit from them because a huge portion of public funds gets eroded with alarming regularity due to ‘avoidable expenses’, ‘unfruitful expenditure’ and ‘undue favours to contractors’.

These phrases have become a staple in almost all audit reports of the CAG. The audit reports all too often point out that to avoid lapses in grants, expenditure is rushed in March; expenditure is brought on accounts even while utilisation certificates are pending; or funds are transferred by bringing expenditure on one scheme from a different grant or programme to the books of an external aid.

The much talked about Asian Development Bank (ADB) loan for urban development in Kerala is a case in point. There is an ongoing debate about the short circuiting of democratic debate and the conditionality that come hand in hand with such external assistance. Those defending the agreement cite the previous ADB assistance to the state for reconstruction and rehabilitation of Tsunami affected areas. Lost in this heat and dust is the latest CAG report that has castigated attempts of officials to show expenditure already incurred from the National Calamities Contingency Fund (NCCF) to the books of the ADB-assisted rehabilitation programme. Criticising these efforts, CAG has asked the state to ensure that the NCCF is replenished to a similar extent.

In another example, a lion’s share of capital expenditure flows towards irrigation and flood control in Andhra Pradesh. Unfortunately, this rarely translates into expansion of area under irrigation, which could address the agrarian crisis in parts of the state. According to the CAG, the state irrigation and command area development department (ICADD) was responsible for unfruitful or avoidable or idle funds to the tune of Rs 4.2 crore. Additionally, out of Rs 3.43 crore spent in the state by the way of wasteful expenditures and overpayments, as much as Rs 2.74 crore was spent by the ICADD.

What is striking in these cases is the absolute indifference displayed over the inspection reports issued after the CAG audits. Errant officials are asked to reconcile the deviations but rarely do such reconciliations occur.

Tendering and signing of agreements before sanctioning work contracts seem to be a regular practice. A close look at audit findings tells us how engineers resort to revisions into certain crucial clauses of agreements. The latest audit report for Andhra Pradesh notes, "The action of Superintending Engineer, Sripada Sagar Project Circle, Mancherial, of changing the performance security payable clause subsequent to the conclusion of an agreement, resulted in an undue benefit of Rs 14.01 crore to the contractors."