The Comptroller and Auditor General of India has said that the first audit report of private telecom companies will be ready by the end of this year.
Private telecom companies were up in arms when after the 2G spectrum allocation scam, the CAG was asked to audit their accounts too. The Association of Unified Telecom Service Providers of India (AUTSP) and the Cellular Operators Association of India (COAI) had challenged a Delhi High Court decision upholding the validity of laws, empowering the CAG to conduct revenue audits of private telecom firms. On April 17, the Supreme Court upheld that the CAG can audit the accounts of private telecom service providing companies since they utilise national wealth, i.e. spectrum, in providing the cellular and fixed line services.
"Work on telecom audit is in progress, and I am hopeful that our first report will be ready before the year-end," said CAG Shashi Kant Sharma at an annual ASSOCHAM summit on corporate fraud. Even though, Sharma lamented that economic progress had thrown up some 'rent seekers' in the corporate world, he sought to reassure industry stakeholders by saying, "CAG audits are never aimed to harass private firms, but to uphold the constitutional scheme of accountability."
Any further audits, clarified Sharma, would be taken up keeping in view the risk assessment as well as impact on public interest.
Sharma also said that public-private-partnership projects, where revenue sharing with the government is involved, will also be audited. "We will be taking up the performance audit of some ongoing PPP projects shortly."
He also said that a report on gas and oil exploration will be presented to the Parliament soon.
Sharma suggested that design and contracts be simplified so that incentives to fudge revenue are systematically removed. He also said that law enforcement and regulatory agencies must be strengthened.
CBI chief Ranjit Sinha, who was also a speaker at the summit, supported Sharma's viewpoint that regulatory bodies should consistently interact with investigating agencies to ensure desired corporate governance. The occurrence of scams and revelations of frauds, Sinha said, draws our attention to the inadequacies in legal, institutional and regulatory framework for corporate governance.
"SEBI, ED, SFIO, Registrar of Companies need to interact frequently at various levels and share intelligence. There should be institutional mechanism for information sharing and use of common database by all," said Sinha.
'Policy paralysis result of eroding values'
Stating that frauds have become accepted norm in the country, Vigilance Commissioner, JM Garg on Tuesday said that the CAG, CBI and CVC are not responsible for policy paralysis in the country.
"Normally people don't invite all of us — CAG, CVC, CAG — together. They think we are the one's who create policy paralysis in the country. But it is not like that," said Garg.
The problem, said Garg, was that the country's value system has eroded drastically in the last 20 years and that the 'quick-rich mentality is pervasive'.
"Even a start-up wants to join the billionaire's club within the first few years," said Garg, adding, "and helping hands are of company auditors who do creative accounting by fudging the balance sheet.'