‘Crony capitalism delayed projects’ says former CAG Vinod Rai

During his tenure as the Comptroller and Auditor-General of India, Vinod Rai submitted damaging reports against the UPA government on what came to be known as the 2G spectrum and coal scams.

This led to the Supreme Court cancelling 2G licences and it may soon cancel the allocation of coal mines.

Mr Rai spoke to Pawan Bali on his experiences as CAG which he has documented in his book, Not Just An Accountant.

You have blamed former prime minister Manmohan Singh for the 2G and the coal scams?
Suppose I am the CAG, i.e. I head an institution, and something goes wrong in that institution. Immediately there are demands that the head of the institution must resign. Last year there were two-three accidents involving naval ships and the poor Chief of the Navy had to resign. He didn’t do the wrong himself, but the top man of that organisation ultimately lands up taking responsibility and blame for anything that is going wrong.

In the 2G case, on November 15, 2007 and December 26, 2007, the then telecom minister (A. Raja) was apprising the Prime Minister about all that he was going to do. The Prime Minister chose not to interfere in what Mr Raja was going to do.

In the coal licences issue, Dr Singh, in fact, was very quick in taking the correct decision, that instead of the screening committee to allocate coal mines, we should go through the auctioning procedure. He took that decision on November 1, 2004, itself. But unfortunately, when he moved out of the coal ministry the other ministers did not pursue it.

Dr Singh has said that “history will judge me more kindly”.
History will be certainly kind to him. Because my role is limited to two-three issues only, which I have brought to the public domain. He is a very senior person. He has issues concerning the entire country to look after, on those issues I am certain that history will be kind to him.

In your book you have dealt with three resources: 2G, coal and natural gas. In 2G, the Supreme Court has already cancelled the telecom licences, in coal deals also a decision on cancellation could come any day. In the case of gas, on the public sharing contracts (PSCs), do you think that the Supreme Court should intervene now?
No, no. It is not an issue in which the Supreme Court needs to intervene. All I am saying is that the PSC contract is for five years, and that is what I represented to the Prime Minister — that at the expiry of the contract this needs to be revised.

You took up the matter of 2G and coal scam. But now allegations are being made against the current CBI director that he was allegedly meeting the accused in the 2G and coal scams. Are you worried that these cases may not reach their logical conclusion?
I am very confident that they will reach their logical conclusion because I have great trust in the judiciary. These are small things we are speculating about. These will not hamper the larger issue of prosecution.

In the book you have mentioned that while you expected some backlash on the 2G report, you did not expect it to be so huge?
If I make a comment about you, obviously you are going to defend yourself. We were prepared for that much. But the backlash which I’ve written about was personal, against us — that we had not foreseen. We didn’t think that people would attack us personally.

In some earlier comments you have said that some Congress MPs tried to pressure you to drop Dr Singh’s name.
When the PAC (Public Accounts Committee) met, one of the members, Ashwani Kumar, came and told us, “Look, let’s not drag the name of the Prime Minister into this”. I told him that his name is already in the report and it is already in Parliament. But then the Prime Minister himself wrote to the PAC chairman, saying that if you want me to come and explain to the PAC I am willing to do that. Then there was a lot of debate within the PAC, whether to invite the PM or not.

The entire purpose of my bringing this out is to showcase the level of intolerance in our society. A constitutional appointee like the CAG sits in a PAC meeting, and in the meetings members of Parliament, also members of PAC, start making wild allegations against the CAG. What is the remedy? PAC chairman has written that members who made wild allegations against the CAG in the PAC must withdraw their words and render an unqualified apology.

Any MP can make any allegation against a sitting constitutional authority, but if I say that these MPs told me to keep some names out, I get legal notices (like, for example, from Congress leader Sanjay Nirupam). What is the remedy for a constitutional authority?

Your reports were partially blamed for what came to be known as “policy paralysis” during UPA-2. Your comment.
That is an unfortunate comment upon the health and the robustness of the Indian economy. Indian economy’s foundations are much stronger than to suffer because there are two reports which go against two departments or the Supreme Court comes forward to cancel one set of licences. We have been very unfair in running down the Indian economy and saying that its fundamentals are so weak that one or two audit reports can affect it so adversely.

Congress leader Jairam Ramesh blamed a “bhumihar from Ghazipur”, that is you, for erosion of the party’s support base in urban areas. Do you think you had a role in the Congress’ defeat?
This is giving too much credit to me, if they think that because I put out two or three reports a political party lost. It’s not environmental factors which delayed projects, it’s not crony capitalism which didn’t deliver projects. It’s not taking decisions at the right time.

So, what are your post-retirement plans? There were wild allegations by your opponents.
They have been saying from the last three years that I have political ambitions. Up until now I have not had any political ambitions, and I have always maintained that politics is not my cup of tea. Let’s see what the future holds. Good people must go into politics, but I’m not cut out for politics.

In your book you have painted a scary picture of crony capitalism?
Crony capitalism is not an expression that I have coined. It has been talked about in the media and the public fora in the last five-six years. Why I took it up is because there are lot of companies which took large number of contracts but have not been able to complete those contracts.

Do you think the new government can solve this problem of crony capitalism?
It is too short a time to judge. But all the public statements that are being made do indicate that there is an intent to solve the problem.

You were concerned over the CAG’s draft reports being leaked to the media and had even suggested to consider it as a breach of Parliament privilege?
Normally what happens is that when we prepare these reports for the Parliament. We don’t give it out till Parliament has seen it. I wrote to the Prime Minister that a lot of these reports are being leaked and that this needs to be brought to the notice of the Speaker, for her to give a ruling that it is very incorrect when channels are able to procure copies of such reports and show them on their channels.