It gives me great
pleasure to be amongst you today on the occasion of inauguration of the
26th Conference of Accountants General. The Accountants General of the
States and their equivalents in the Centre are important functionaries
assigned with the task of being watchdogs of public finance.
I am happy to note that the theme of this year’s conference is
“Strengthening Professional Practices”. Being a knowledge based
organisation, it is important that the practices followed by the
department are continuously updated and universally and fairly applied.
The institution of C&AG is an important part of the governance and
accountability structures of our country. Its existence underpins and
highlights the necessity for accountability of public expenditures by
public authorities towards Parliament which represents the Supreme will
of the people of this country. One of the main instruments through which
Parliament exercises this accountability is the office of the CAG. It is
in recognition of this role that the CAG has been assigned
constitutional status by our founding fathers.
A constitutional mandate for the CAG also reflects the high value that
we have placed on integrity and transparency in our public life. All
public servants in this country are first and foremost accountable to
people. The rationale for whatever decisions that we take must be
empowerment and welfare of our people. This is absolutely fundamental
for any democratic system. There will be moments in a nation’s life when
institutions would appear to be under stress but as long as we have
faith in our basic democratic values and the supremacy of our people and
Parliamentary processes, we shall be able to tide over any crisis that
we may face.
From the time we opened up our economy in the Nineties, Government has
had to take many decisions of far reaching import the results of which
are becoming visible only now. Financial sector and social sector
reforms do not deliver overnight and their full impact on a country’s
economic and social well-being is felt only over extended periods of
Most such reforms also involve use of public money and public resources.
Optimal use of such resources by balancing conflicting demands on such
public resources has always been the challenge for the decision makers
in all sectors and in all parts of the world. In a country like India,
public administrators have, in addition, the onerous responsibility of
actively ameliorating the conditions of the poor and the needy as soon
as possible. As I stated at the time of assuming the office of the First
Citizen of our country, trickle down theories of growth will no longer
work in the Indian context. When we talk about optimal decision making,
we will do well to keep in mind that, in the long run, use of public
money must improve the living conditions of the people.
Governance during the last six decades has become much more complex.
Public expenditure has increased manifold, newer delivery mechanisms
have had to be thought of and brought in to reach services to the
people. The range of governmental activities itself has changed
manifold. Before independence, administration was colonial and mainly
responsible for revenue collection and law enforcement. With
independence and introduction of the planning process, Governments- both
at the Centre and the States- took upon themselves many responsibilities
that were unthinkable previously. Governments built factories, roads,
ports and public infrastructures. They also directly provided services
like health and education. The thrust on developmental administration
from a purely revenue earning and law and order centric administrative
system represented a major paradigm shift.
Another major paradigm shift is taking place today. We have realised
that governments alone cannot do everything. As a result, we have many
players who are responsible for public expenditure and for delivering
services- not only the Central and State Governments but also local
bodies, registered societies and NGOs etc. Given the scale of funding
required, particularly for infrastructure financing, Public Private
Partnerships (PPPs) have emerged as part of the institutional framework.
They represent recognition by the Government of the need to engage with
the Private Sector in diverse areas for the purpose of ensuring
broad-based and sustainable growth.
This has introduced great complexities in funds flow, expenditure,
accounting and evaluation. In our efforts to reach services to the poor
and the needy in the remotest corners of our country, we have had to
develop faster channels of service delivery. There have been occasions
when the system was not fully developed, the process of accounting not
fully operational, the local officials who handled government money not
fully skilled in their multifarious functions. This is, however, a
reality we need to accept and a situation we need to address through
continuous capacity building and upgradation of human skills.
I am happy that the C&AG for the past several years has taken a positive
approach on this and has not hesitated to offer his helping hand to
governments and local bodies in building up and enhancing skills in
financial management. Your department has developed considerable
expertise in financial management through your exposure to different
organizations. It is in the fitness of things that the expertise
available should be utilised fully. I hope you continue your efforts in
Public audit, I am aware, is just one aspect of financial
administration. What is most important is that we must introduce a
robust internal control system in all spheres of government activity.
Many significant steps have been taken. Ministry of Defence has, for
example, worked out detailed “Defence Procurement Procedures” for
capital procurement. The ‘Public Procurement Bill’ 2012 has been
introduced in the Lok Sabha. Several state governments have now
established full-fledged Internal Audit departments within the
Government. The Union Ministry of Finance is currently examining the
Report of the Working Group set up to strengthen ‘Internal Audit
Mechanisms’ in Government of India. I am sure that the recommendations,
once accepted by the Government, will go a long way in making Internal
Audit an effective tool of governance and internal control, thereby
complementing the role of the CAG. All these are significant steps
towards transparency and good financial administration.
Equity and justice, fairness and transparency, therefore, continue to be
cornerstones of our polity. India is once again on the cusp of change.
The transformational agenda that we have boldly undertaken requires
innovation and performance. It requires huge resources but, more
importantly, it requires judicious use of these resources so that we get
the optimal outcome from these resources. Every institution in the
government must reorient themselves for these momentous changes and must
be ready to contribute.
I am glad that during the past years, CAG’s audit has shifted from
routine compliance audit to a more macro perspective. I must, however,
stress that while redefining organisational roles and boundaries, all
constitutional authorities need to adhere to the fine and calibrated
system of checks and balances which forms the bedrock of our governance
structures. Any attempt by any organ of the State to overreach will
unnecessarily lead to dissonance within the system. It is, therefore,
necessary that all constitutional authorities introspect on their
I am aware of the initiatives of CAG to involve the civil society
organizations and the beneficiaries in the audit process. This enriches
the audit process and provides a feedback that is relevant and timely.
You have well trained personnel and wide geographical reach. What we
could all benefit from is a record of the best practices that you would
come across in villages, blocks and districts in respect of social
programmes so that these practices can be replicated.
Audit reports are essentially feedback on the many programmes undertaken
by the government. The tone and timeliness of such feedback is,
therefore, important. The Central Government releases funds to State
Governments and even to the local bodies at district levels. The
utilization of these funds is known to the Central Government only
through the mechanism of utilization certificates. By the time these
utilization certificates are received, the programme has already been
implemented. It is thus important that CAG’s reports are presented in
time so as to enable mid-course corrections, if required.
We have a fairly stabilised system of the ‘Public Accounts Committee’
and the ‘Committee on Public Undertakings’. Through these committees,
the Parliament and State Legislative Assemblies exercise the oversight
functions that are expected of them. These institutions have always
functioned in a bipartisan manner and have contributed a great deal to
the cause of transparency and good governance. It is an important
responsibility of the legislators to ensure that such committees remain
active and all important observations of audit are considered with all
the seriousness that they deserve.
I am happy to note that C&AG, as the Apex Audit Institution of India,
has remained in the forefront of international audit. Apart from being a
member of the Board of Auditors for UN and other Agencies for almost two
decades, you have conducted audit of United Nations and many other
International Organizations. You have earned great respect from the
international community for your knowledge, skills and high professional
I acknowledge that the unique institution of CAG has over the years, now
more than 150 years old, made significant contribution to ensuring that
we have governance systems that are transparent and accountable. I have
great expectations from this Institution in our journey towards a
prosperous and equitable future for our people. I would like to wish all
members of the Indian Audit & Accounts Department all the best.