After the recent controversies over the audit findings of the Comptroller and Auditor General (CAG) on spectrum and coal allocations, the Centre is now trying to mend its troubled relationship with the apex auditor.
Finance minister P Chidambaram on Tuesday asked the CAG to scan for wasteful expenditures, fund diversions and tax leakages to help the government meet its fiscal deficit target.
Both government and CAG have the common goal of infusing greater transparency and improving financial management, Chidambaram said, adding, ?unfortunately some dissonance has crept into the public discourse and the CAG and government have been cast as adversarial to each other.”
The Finance Act of 2012 mandated CAG to review the compliance of Fiscal Responsibility and Budget Management Act.
?The auditor should look at the estimated expenditure and the actual expenditure and ask the question if there has been any wasteful expenditure or diversion of funds or falsification of accounts,” Chidambaram said at a conference.
Similarly on the tax side, CAG should ask the question if there has been any laxity in tax administration, if any authority has waived or written off tax dues without proper justification, he said.
“Government looks to the auditor?s report to improve its systems and procedures so that, both on the revenue side and the expenditure side, government is able to meet its budgeted targets,” he said.
The comment comes at a time when the government is in a tight spot in cutting the fiscal deficit to 5.1% of GDP in 2012-13 from 5.8% last year, to prevent a rating downgrade. ?Fiscal stability and fiscal consolidation can be achieved only by placing an equal stress on revenue and expenditure,? Chidambaram said.
The finance ministry has also asked CAG to help in revision of the list of major and minor heads of account, he said. In recent years, the government’s policies on allocation of 2G spectrum and coal blocks without auctions was contested by the CAG, which projected notional loss running in trillions of rupees to the exchequer. The CAG reports created a political furore with the opposition parties disrupting parliament session demanding the resignation of senior ministers, including Prime Minister Manmohan Singh.
Chidambaram justified the government stance saying that policy making sometimes is through “trial and error”, and decisions are often taken without full information and under uncertain environment.
“It is my intention and desire as the minister in-charge of finance to work with the CAG and his colleagues to erase the impression of adversaries and restore trust and confidence in all institutions of government,? he said.
