CAG to review gram panchayat audit

The Comptroller and Auditor General of India (CAG) will now review the gram panchayat audit too, which was earlier conducted by the local fund audit under the state governments.

This becomes all the more necessary in the backdrop of the rural credit getting a quantum jump as per the Budget announcement. Farm credit is set to double in the next three years, from Rs 80,000 crore in 2003-04 to over Rs 1,60,000 crore.

CAG has asked the Gujarat government apart from the other state governments, to form an apex committee to review audit objections.

The apex committee is expected to be headed by the chief secretary of the state and all the respective departments under the state government will report to the committee before the compilation of the final audit report.

"The apex committee will help to sort out the disagreements between CAG and the state government before the report is finalised. This will help to expedite the process of audit by state governments," Vijayendra Nath Kaul, Comptroller and Auditor General of India, told Business Standard on Friday.

It was his first visit to Gujarat after assuming the office.

"We had a meeting with the chief minister along with the state chief secretary. The state government has agreed in principle to the CAG's recommendations about forming an apex committee, headed by chief secretary P K Laheri. The chief minister has assured us that proper action will be taken to review the audit objections," said Kaul.

Gujarat has agreed to the gram panchayat audit review by the CAG. The CAG will provide technical guidance, scientific development of action plan of the gram panchayats, check through test audits amongst others.

"The review of gram panchayat audit by CAG will ensure uniform level of audit across the country, though various state governments have strong apprehensions as they feel that the CAG will have control over state government's expenditure," said Kaul.

CAG's conducting gram panchayat audit comes from the recommendation of the Eleventh Finance Commission, in view of the quantum of farm credit being enhanced from Rs 80,000 crore in 2003-2004, to Rs 1,05,000 crore during the current financial year.

The finance ministry has also asked the banks to ensure 30 per cent growth over the credit extended during 2003-04.