Date: May 21, 2013
PRESS RELEASE: HOW WAS NEW CAG SELECTED?
Vinod Rai, the present CAG, retires tomorrow. On 23rdMay at 1 pm, the new CAG would take oath.
Shri Shashi Kant Sharma, IAS (1976 – Bihar Cadre) has been selected as the new CAG. Presently, he is the Defence Secretary from July 2011 onwards (now on extension in service). He was Joint Secretary, Additional Secretary and DG (Acquisition) in the Defence Ministry between 2003 and 2010. Therefore, he has worked in the Defence Ministry for almost 10 years when all important Defence acquisitions were made. This is concurrent to UPA’s tenure. Such long period for a bureaucrat in the same ministry is unusual. UPA has even granted him an extension after retirement. This indicates his proximity to UPA bosses.
How was he selected? An RTI was filed in this regard. Department of Economic Affairs and Cabinet Secretariat kept tossing this RTI application for almost three months, before finally replying just a few days back.
(Response is attached. Since RTI was filed by some government servant, who does not wish his name to be disclosed, the name of the applicant has been blacked out in attachment.)
In its reply dated 16.05.2013, the Department of Economic Affairs has admitted to the following four broad things:
i. That there is no formal system for appointment/selection of the CAG of India, and the selection of the CAG is done only in terms of 'past conventions and practices'.
ii. That no Selection Committee/Collegium is constituted by the Government for the purpose of appointment/selection of the CAG of India.
iii. That on a Note moved by the Ministry of Finance, the Government makes recommendations to the President of India for the appointment of the CAG.
iv. There are no Eligibility Criteria for appointment of a person as the CAG of India.
This shows that the selection of CAG is completely in government’s hands and the process completely in-transparent and arbitrary. Government can appoint any person as CAG. Given the fact that Vinod Rai had given sleepless nights to the governments of almost all political parties and to some of the biggest corporates in the country, the absence of any procedure for selection of CAG and government’s complete discretion in this regard creates a scope for the government, in collusion with those corporates, to select a completely pliable (and maybe dishonest) person as successor.
The appointment of a person as CAG through such an arbitrary and non transparent process, especially someone who will have serious conflict of interest in his job, since a major part of the CAGs job is to audit defense purchases, which Mr. Sharma has been involved in for so many years, compromises the principle of 'institutional integrity' which the Supreme Court had laid down while quashing the appointment of the previous CVC who was appointed in similar circumstances. This makes Mr. Sharma's appointment illegal and liable to be struck down.
Interestingly, the whole process of selection of Vinod Rai’s successor took place in complete secrecy. Yet, none of the political parties raised this issue. Why?
Because huge stakes are involved. Reliance’s KG Basin is being audited by CAG. Right from beginning, Reliance has been reluctant in getting itself audited. They put all kinds of obstacles and did not provide records to the audit team. The electricity companies in Delhi have resisted CAG audit and have gone to the court in this regard. All these companies could be waiting for the new CAG to be appointed. If the new CAG is a pliable person, one won’t be surprised if all of them agree to get themselves audited.
A weak and pliable CAG is in the interest of all political parties and some corporates who are corrupt.
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