A big loss

The Comptroller and Auditor General of India is being increasingly questioned, as reports emerge about the divisions within the agency on calculating the loss to the public exchequer from the 2G licencing process. The CAG shot for drama in its high-profile press conferences, in which eye-catching numbers were trumpeted that became firmly ensconced in our collective memory. The 2G report was brandished triumphantly, like a World Cup trophy, in what appeared less an exercise in informing the public and Parliament than in a submission to prime-time sensationalism. The estimate of the presumptive loss to the treasury from the licencing process was questioned almost immediately; naturally, given that the figure insisted on, Rs 1.76 lakh crore, was so enormous, so outlandish.

It seems, now, that the CAG’s hubris was even greater than previously suspected. So intent were the agency’s leaders on the higher figure that lower estimates from those closer to the subject were ignored; and, as this newspaper reported on Saturday, the lead auditor was discouraged by the agency’s head, Vinod Rai, from asking for the response of the department of telecommunications to the CAG’s suppositions. The refusal to allow the DoT to explain itself violates simple principles of justice and our sense of due process. The auditor in question, R.P. Singh, was supposedly the one conducting the 2G audit, and he had estimated the losses Rs 2,645 crore — a number substantially different than the final report’s Rs 1.76 lakh crore. That was tacked together using various different methods — most remarkably, by directly comparing values from the 3G auction last year to the 2G licencing process half a decade earlier.

Earlier this year, the prime minister pointed out that, if auctions have not taken place, calculating any loss is deeply problematic: “There are various estimates, but you have to assess what is the right magnitude after asking yourself what was the right price.” When the losses you are trying to calculate are presumptive, your assumptions matter. And, thanks partly to the Right to Information Act, which was designed precisely to uncover such establishmentarian excess and subterfuge, it seems clear now that the CAG wanted to jerry-rig the assumptions to give us the largest, most staggering figure for the loss possible, like a big-talking hunter would exaggerate the size of the tiger he shot. This is worryingly irresponsible. The CAG has an important role to play in helping Parliament oversee the executive’s expenditure; it seems a pity that it is bent on undermining its own credibility.