Why doesn’t the CAG look at its own past work?

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23 August 2018

Last month a new audit report of the Comptroller and Auditor General of India (CAG) was tabled in parliament. This stand-alone volume contains performance reviews of various National Projects – irrigation schemes which were declared by the Union Government to be in the strategic national interest ten years ago – for the period 2008-2017. The selected projects were to be accorded high priority by Central government in terms of technical and financial support to ensure “early implementation and completion”.

What has actually happened since that step was taken? More of the same that one finds in many other projects, whether they are of national importance or not. The CAG auditors found that the costs of these projects had escalated by 2341 per cent, and despite this there were shortfalls in actual progress ranging from 8 to 99 percent. So much for declaring these to be projects of national importance.

But then, the CAG has been publishing audit reports on irrigation projects for the last four decades, and finding roughly the same things again and again. In particular, it was quite clear in 2008 that accelerated funding alone would not do much to tackle the huge delays in irrigation projects.

Let’s go back ten years, to understand things better. Perhaps the government hoped that by granting these projects ‘national’ status, things could continue in business-as-usual mode, with project authorities not complying with environmental laws and regulations. Further, the government may even have been trying to influence public perception vis-a-vis the popular protests launched by affected communities against many of these projects, on the grounds that the social and ecological costs of these irrigation dams far outweighed stated benefits.

Such possibilities come to mind because the sorry mathematics of irrigation projects in India had begun to enter policy discussions in 2004. In June that year, the Planning Commission published a report titled, “The Status of Ongoing Major and Medium Irrigation Projects that spilled over to the Xth Plan”. The report pointed out that as against 20.2 million hectares envisaged to be irrigated by these 380 projects, irrigation potential created by the end of IXth Five Year Plan stood at only 6.937 hectares. Planning Commission report also estimated that despite the billions already spent on these projects that spilled over to the Xth Plan, another USD 19.6 billion was needed to complete them.

The Planning Commission and the Ministry of Water Resources had by then already started whispering about granting a select few projects the ‘National project” tag in order to facilitate large funding from the central government. We had called out this policy doublespeak in an article back then, “PC or PC? Who sets the Policy?” (see links to related articles in box)

What was also curious in 2008 was the fact that there already existed two robust performance audits on two centrally sponsored schemes in the Irrigation sector – one performance audit of the Accelerated Irrigation Benefit Programme (AIBP), and a second one on Command Area Development but the policy discourse appeared to be refusing to pay any attention to the messages emerging from these performance audits.

The CAG audit report on AIBP – which examined the performance of the centrally sponsored scheme for the period 1996-2003 – stated, “The programme was based on the premise that funding was the main constraint and with an assured flow of resources, (irrigation) projects would be completed. Audit scrutiny revealed that despite AIBP funding of the 23 pre-Fifth Plan, only 3 projects were reportedly completed as on March 2003”.

AIBP funds were granted to 172 so-called ‘last mile’ projects, and CAG audits showed that “despite spending Rs 13,823 Crores, only 23 out of 172 projects had been completed”. Without mincing their words, CAG auditors showed that irrigation potential covered under AIBP projects was a mere 28 per cent of the target (2840 thousand hectares out of a planned 10042 thousand hectares), and of this only 11 per cent could be actually covered under irrigation utilized (314 thousand hectares). CAG report had also sharply criticized that almost one third of the selected projects (57 out of 172) had not created any irrigation potential despite their inclusion under Accelerated Irrigation Benefit Programme!

That was itself not the first instance of the CAG stating the obvious; the warning bells on what ails irrigation sector in India were sounded even earlier by the CAG itself. In the 1970s, the institution had produced a stand-alone volume that looked at the performance of 16 major and medium irrigation projects in command areas. That report still remains one of my favorites, despite the long years that have passed since it was published. I had come across this performance review while assisting my friend Shripad Dharmadhikary of Manthan Adhyayan Kendra in 2003. I spent several hours sifting through the government documents on dusty shelves the first floor of JNU library and in the library of Indian Institute of Public Administration.

In 1999 another performance audit report – this time, one that intensely scrutinised what plagued the centrally sponsored Command Area Development Programme – entered public domain. This audit appeared in a separate volume that carried performance reviews of five centrally sponsored schemes, and the auditors’ comments on the CADP ran into 25 pages of long narratives.

What all of this suggests is that it is time we begin to expect – and demand – institutional memory in audit reports of the CAG. If the auditors would also start devoting their time to study the earlier reports that are relevant for the audit being conducted, their messages would emerge much clearer. If this strategy of giving due references to earlier performance audits on the same audited entity is adopted, there is a good chance we can see how some policy decisions were flawed from the very beginning. The CAG performance audit of State Industrial Development Corporations follows this approach; so there is precedent for doing things this way.

Over the years, academicians and the media have indulged in unending hair splitting arguments on whether India’s constitutional auditor should be commenting on policy making. Perhaps that’s beyond its mandate and charter, but the message from the latest performance audit is quite clear – at the very least, CAG auditors must not hesitate to call out policy decisions that turn out to be malafide from the very start. If that metric isn’t adopted, the audits that follow aren’t likely to help us correct courses in public expenditure.

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