To Our Readers: Matrix of Accountability


Back to Basics for Transparency in Governance

This issue of the Common Cause journal is devoted to one of democracy’s most crucial watchdogs, the Comptroller and Auditor General (CAG) of India. So vital is the role of the institution for democracy that India’s future as a potential economic superpower hinges on this factor alone. But why are we talking about it today? Isn’t CAG functioning fine with its no-nonsense reports and an impressive track record?

Well, we are talking because India’s supreme audit agency seems stuck somewhere between being a people’s watchdog and yet another high-profile office working for those in power. True, its odd reports have created ripples but, let us face it, they have not been able to stem the rot. The moot point is that a systemic, scientific audit is central to the growth and well-being of our nation of 1.3 billion people, particularly its poor and aspirational masses. The destinies of such people depend on a climate of growth and fair opportunities which have a lot to do with good, accountable governance.

A dependable watchdog guards a property against theft or intrusion. It must alert the owners at the right time. We also know that all watchdogs do not always bark and bite, and in some cases, they may even show undue obedience to the enemies. But all limits are crossed when the watchdog becomes someone’s lapdog and that is the most troubling aspect of the watchdog institutions meant to guard democracies. Our attempt is to analyse with the help of specialists if the watchdog called CAG is being made ineffectual and what can the people, the real owners of the property, do.

The role of the CAG becomes more and more crucial as India moves up on the list of the world’s top and fastest growing economies. By 2050, India’s economy, which is currently at the seventh place, is expected to be second only to China. And if we do not improve governance and plug the pilferage in the delivery of services by then, we could be saddled with the world’s largest population of young people who are not in proper employment, education or vocational training, despite economic resurgence.

The age of technology, globalisation and public-private partnerships may have thrown new challenges but the rules of the game remain the same as they were when the idea of an audit was first mooted. Whatever you do, but in the end, accountability in expenditure has to be made a part of the culture and never left to the executing authorities. The spending of public money must also be overseen by the public or its institutions because lack of public participation is a breeding ground of corruption whose real cost is borne by the poor. No wonder, the state audit of accounts is as old as the state itself.

The term audit comes from its Latin root ‘audire,’ which relates to hearing. An audit in days of yore was meant to be an oral and loud scrutiny of accounts read out to an audience. The obvious purpose was to instil transparency in public expenditure. The idea was also to make sure that those entrusted with the responsibility of spending public money were not allowed to get away without explaining the rationale for every penny spent.

Historical references are available from medieval Europe of the 1500s where an audit was meant to be a public scrutiny of accounts enacted in front of the real people. This tells us something precious about the exercise. First of all, an audit was meant to be an open and public exercise which was inherently participatory in nature. Secondly, it was part of a process in which those in-charge of accounts and decision making (presumably on behalf of the public) were held accountable to their peers. And lastly, the auditors by all accounts, were known to be impartial persons, akin to the ‘panch parmeshwar’ of the ancient Indian tradition.

If you want to capture a glimpse of people’s audit, try and visit a social audit in rural India which takes place in front of a village panchayat as part of Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). Social audit of the panchayats is direct, rudimentary, and yet, an effective exercise, except in cases where it is hijacked by vested interests. It marries grassroots governance with keen public participation. It is a great example of an imaginative policy design, reinvented. However, the obvious caution is that a face to face exercise is best done as a micro level activity at a small scale.

Since the days of the oral procedures, the world of audit, accounting and public expenditure has changed radically, and multiple times. Old civilisations like India and China had their own accounting systems with sophisticated instruments like cheques and bearer bonds. Many of these devices were retained in modern accounting systems which were formalised in early 21st century by the colonial powers. However, governance, even in ancient times, had its own mechanisms of audit and accountability. In old Indian classic, Arthashastra, sage Chanakya lists several types of frauds, embezzlements, misappropriation and concealment of facts which the good rulers were required to guard against.

In the modern Indian context, the institution of audit is colonial and is structured on the British model. India’s formal audit process was started in the 1860s. After Independence in 1947, the Indian constitution bestowed special status on the office of the CAG. The father of the Constitution, Dr Bhimrao Ambedkar, made the CAG as one of the most important officers of the Republic and covered it with a parliamentary oversight to maintain public accountability. However, the subsequent governments entirely failed to build on the institution’s original strength, brick by brick, while learning from experiences and building on strengths.

Nothing stopped us from restructuring the CAG of India as an autonomous body, insulated from the political class and independent of the executive whose work it is meant to scrutinise. On the contrary, we have conceded the high office of the CAG to the executive. While many developed nations are extending public audits to private behemoths, we are doing the opposite by removing public-private partnerships from its ambit.

In the past, Common Cause has taken up the issues of rationalising the CAG’s appointment and that of the CAG audit of the government-supported entities which are dealing in land, urbanisation and town planning. To us, the future of the institution of CAG is yoked to the health of democracy in India. The real issue is not of technology or manpower or skillsets, not even resources. It is of going back to the basics, where public accounts are scrutinised by strong and capable public institutions. It is also of building a culture of checks and balances in democracy through time-tested mechanisms of transparency and accountability.

Like always, we will wait for your comments and suggestions. Please write to us at commoncauseindia@

Editor : Vipul Mudgal

July-September, 2018