 "<b>Tea with BS:</b> Vinod Rai")
Vinod Rai, former Comptroller and Auditor General (CAG), is quite a complex individual. Over tea and toast at Delhi's Gymkhana Club, he came across as disarmingly friendly and self-effacing. But there is steel under the velvet. The compulsion to do the right thing wrestles with the need to be understood. The man is all torn up inside, I thought as I struggled to pour tea without letting the leaves into the cup: for all its resources and pretensions the Gymkhana Club does not believe in providing tea strainers, writes Aditi Phadnis.
Rai has held several important posts - in the ministries of commerce, defence, and finance - but it was his last job as CAG that catapulted him to the role of Chief Upsetter of Government when he came out with three reports that charged the government with massive financial mismanagement. These were the reports on the 2G spectrum scam; the Commonwealth Games; and the coal block allocation scam. Each one revealed how ministers and public persons had been feathering their own nests with money that belonged to the people of India. "You're a hero," I remarked as we settled down. "Oh, please don't say that," beseeched Rai. "Replace the 'h' with a 'z' and you will have found the right description for me," he said.
Rai explained that to him, an audit was not a criticism but a critique and he couldn't understand why people did not see the CAG reports in that perspective. "I've sat on any number of boards of corporations myself. I was the managing director of a state enterprise. There are two ways of reacting to an audit: some might agree with it and take remedial measures to correct mistakes; others may disagree with an audit. There is nothing that says all recommendations of an audit have to be accepted," he said.
"The minister, Mr Reddy, said: 'we will accept those recommendations made by the CAG that are practical; and those that we don't agree with, we will explain to Parliament.' I thought the attitude of the government was fair," Rai said. "After all, audit reports will come, some will be critical of the government, the relationship between the CAG and the government of the day is adversarial, but personal criticism of the CAG…"
"Did you ever think of quitting? Some pretty harsh things were said about you," I asked. I was referring to Information Minister Manish Tewari's comment that instead of validating his figure of presumptive loss of Rs 1.76 lakh crore in the 2G spectrum scam, the CAG "had chosen to criticise the government on foreign soil and at a foreign fora" (Harvard University where Rai had delivered a lecture). "Never," said Rai vehemently. "I was fortified by the constant support of my officers who stood with me to a man."
"All except one," I remarked. R P Singh, Director General Audit, had rubbished the figure of presumptive loss and told TV channels that the loss due to the first-come-first-served policy followed by the government was Rs 37,000 crore and this, too, was entirely "recoverable". He had also said he had tried to bring this to the notice of the CAG who had refused to meet him on the subject.
Rai did not offer a defence. Instead, he recounted an incident: Singh had delivered a lecture at the Indian Administrative Service (IAS) Probationer' training academy at Shimla and had said there that the 2G spectrum scam report "is the best report I have ever prepared". "I offered to tell the Public Accounts Committee, the number of times Mr Singh had met me before he claimed I refused to meet him: the entries were noted in my diary," he said.
But clearly, he is still tormented by the attacks. He could have kept quiet, he said, for he knew the reports, especially the 2G spectrum report, would do terrible damage to the government when it was made public. "Obviously there would have been a backlash. You've hurt somebody. That person is not going to take it lying down. But I did not factor in a personal attack. That's why I said it is feeble minds that make personal allegations."
Rai belongs to the Kerala cadre of the IAS and recalled with great fondness his first posting in Thrissur, the district which has a 60 per cent Hindu, 20 per cent Christian and 20 per cent Muslim population. It was during his tenure that he organised a visit by Pope John Paul II who had come to India at the time. "I was fortunate to get complete support from the Chief Minister, Mr Karunakaran, and the people of Thrissur. In fact, as CAG, they held a function to mark the silver jubilee of the Pope's visit and invited me to attend," he laughed.
I asked him why nothing can be done to stop leakages from the Indian system. There are so many checks and balances and yet…
"When we were posted in the district, the money you would get for development work was around Rs 10 crore or Rs 12 crore annually, Rs 15 crore if you were lucky, Rs 18 crore if you were very lucky. Today this amount is around Rs 300 crore or Rs 400 crore. In NREGA [the rural employment guarantee scheme], you pay people to get 100 days of guaranteed work in a year to create rural infrastructure. You spend that order of money but what is the tangible asset? You make a road, you can say it got washed away in the rain. We did a report on water. Restoration of water bodies is one of the things on which NREGA can spend money. Not only was there no water in the bodies the local administration claimed to have restored, there was no indication that all habitations would have access to safe drinking water any time in the near future" because the progress of the National Rural Drinking Water Programme is so slow. We found that of the 112 projects approved between 2008 and 2012, none were completed and 80 were not started at all for want of approval."
I suggested that there was a huge capacity deficit in panchayati raj bodies. In Bihar, for instance, there was reservation for women in panchayats but half a dozen women panchayat heads were in jail on charges of embezzlement simply because they didn't know basic accounting principles and their husbands had fudged the accounts. Rai agreed and said the demands of the people for better services were only going to rise. So everyone needed to think how the system could be made more transparent.
The Gymkhana Club is a beautiful building but high ceilings make it hard to keep it cool. Sweat began to pour like rivulets down our faces. Staff, taking pity on our discomfort, suggested we could have our toast in the air-conditioned restaurant. We declined and the toast arrived wrapped in the curious device peculiar to the Gymkhana Club: squares of grease-proof paper that keeps the toast free from grease but transfers all of it to your fingers. Rai asked me to cap my pen and close my notebook. What followed was toast and gossip that I am not at liberty to reveal. But both were absolutely delicious.
Rai has held several important posts - in the ministries of commerce, defence, and finance - but it was his last job as CAG that catapulted him to the role of Chief Upsetter of Government when he came out with three reports that charged the government with massive financial mismanagement. These were the reports on the 2G spectrum scam; the Commonwealth Games; and the coal block allocation scam. Each one revealed how ministers and public persons had been feathering their own nests with money that belonged to the people of India. "You're a hero," I remarked as we settled down. "Oh, please don't say that," beseeched Rai. "Replace the 'h' with a 'z' and you will have found the right description for me," he said.
Rai explained that to him, an audit was not a criticism but a critique and he couldn't understand why people did not see the CAG reports in that perspective. "I've sat on any number of boards of corporations myself. I was the managing director of a state enterprise. There are two ways of reacting to an audit: some might agree with it and take remedial measures to correct mistakes; others may disagree with an audit. There is nothing that says all recommendations of an audit have to be accepted," he said.
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For instance, he cited the CAG report on the Krishna-Godavari Basin. Jaipal Reddy was the petroleum minister when that CAG report was submitted. The report said Reliance Industries, Cairn India and GAIL India deviated from some of the terms of their oil and gas production sharing contracts with the government and the CAG held the petroleum ministry and the Director General, Hydrocarbons responsible for "a number of deficiencies in compliance and control" with respect to the contracts with these companies.
"The minister, Mr Reddy, said: 'we will accept those recommendations made by the CAG that are practical; and those that we don't agree with, we will explain to Parliament.' I thought the attitude of the government was fair," Rai said. "After all, audit reports will come, some will be critical of the government, the relationship between the CAG and the government of the day is adversarial, but personal criticism of the CAG…"
"Did you ever think of quitting? Some pretty harsh things were said about you," I asked. I was referring to Information Minister Manish Tewari's comment that instead of validating his figure of presumptive loss of Rs 1.76 lakh crore in the 2G spectrum scam, the CAG "had chosen to criticise the government on foreign soil and at a foreign fora" (Harvard University where Rai had delivered a lecture). "Never," said Rai vehemently. "I was fortified by the constant support of my officers who stood with me to a man."
"All except one," I remarked. R P Singh, Director General Audit, had rubbished the figure of presumptive loss and told TV channels that the loss due to the first-come-first-served policy followed by the government was Rs 37,000 crore and this, too, was entirely "recoverable". He had also said he had tried to bring this to the notice of the CAG who had refused to meet him on the subject.
Rai did not offer a defence. Instead, he recounted an incident: Singh had delivered a lecture at the Indian Administrative Service (IAS) Probationer' training academy at Shimla and had said there that the 2G spectrum scam report "is the best report I have ever prepared". "I offered to tell the Public Accounts Committee, the number of times Mr Singh had met me before he claimed I refused to meet him: the entries were noted in my diary," he said.
But clearly, he is still tormented by the attacks. He could have kept quiet, he said, for he knew the reports, especially the 2G spectrum report, would do terrible damage to the government when it was made public. "Obviously there would have been a backlash. You've hurt somebody. That person is not going to take it lying down. But I did not factor in a personal attack. That's why I said it is feeble minds that make personal allegations."
Rai belongs to the Kerala cadre of the IAS and recalled with great fondness his first posting in Thrissur, the district which has a 60 per cent Hindu, 20 per cent Christian and 20 per cent Muslim population. It was during his tenure that he organised a visit by Pope John Paul II who had come to India at the time. "I was fortunate to get complete support from the Chief Minister, Mr Karunakaran, and the people of Thrissur. In fact, as CAG, they held a function to mark the silver jubilee of the Pope's visit and invited me to attend," he laughed.
I asked him why nothing can be done to stop leakages from the Indian system. There are so many checks and balances and yet…
"When we were posted in the district, the money you would get for development work was around Rs 10 crore or Rs 12 crore annually, Rs 15 crore if you were lucky, Rs 18 crore if you were very lucky. Today this amount is around Rs 300 crore or Rs 400 crore. In NREGA [the rural employment guarantee scheme], you pay people to get 100 days of guaranteed work in a year to create rural infrastructure. You spend that order of money but what is the tangible asset? You make a road, you can say it got washed away in the rain. We did a report on water. Restoration of water bodies is one of the things on which NREGA can spend money. Not only was there no water in the bodies the local administration claimed to have restored, there was no indication that all habitations would have access to safe drinking water any time in the near future" because the progress of the National Rural Drinking Water Programme is so slow. We found that of the 112 projects approved between 2008 and 2012, none were completed and 80 were not started at all for want of approval."
I suggested that there was a huge capacity deficit in panchayati raj bodies. In Bihar, for instance, there was reservation for women in panchayats but half a dozen women panchayat heads were in jail on charges of embezzlement simply because they didn't know basic accounting principles and their husbands had fudged the accounts. Rai agreed and said the demands of the people for better services were only going to rise. So everyone needed to think how the system could be made more transparent.
The Gymkhana Club is a beautiful building but high ceilings make it hard to keep it cool. Sweat began to pour like rivulets down our faces. Staff, taking pity on our discomfort, suggested we could have our toast in the air-conditioned restaurant. We declined and the toast arrived wrapped in the curious device peculiar to the Gymkhana Club: squares of grease-proof paper that keeps the toast free from grease but transfers all of it to your fingers. Rai asked me to cap my pen and close my notebook. What followed was toast and gossip that I am not at liberty to reveal. But both were absolutely delicious.