Need for A Collegium to Choose The Next CAG

A Surya Prakash 

(Distinguished Fellow, VIF)

Speaking on the role and functions of the Comptroller and Auditor General (CAG) of India in the Constituent Assembly on May 30, 1949, Dr. B.R. Ambedkar, Chairman of the Constitution Drafting Committee, said that this officer was “probably the most important officer in the Constitution of India” because he is the one man who is going to see that the expenses voted by Parliament are not exceeded or varied. “If this functionary is to carry out the duties- and his duties, I submit, are far more important than the duties even of the judiciary ………I personally feel that he ought to have far greater independence than the Judiciary itself”.

Without exception, every member of the Constituent Assembly who spoke on the articles relating to the CAG, including T.T. Krishnamachari (TTK), Pandit Hirday Nath Kunzru, K.T. Shah and R.K. Sidhva – fully endorsed Dr. Ambedkar’s sentiments. The primary objective of the assembly appeared to be to clothe the CAG with such powers that the executive would in no circumstances be able to weaken his independence and objectivity. As a result, the first amendment moved that day was to change the nomenclature of the Auditor General to Comptroller and Auditor General, because as TTK said, the function of the Auditor General is not merely to audit but to have a control over the expenses of government. The nomenclature, he said, should be in consonance with the duties that are entrusted to him by the constitution. The House also took some more decisions in this regard, including the decision to put the administrative expenses of the office of the CAG including salaries, allowances and pensions payable on the charged account (meaning that these expenses would not be voted upon by parliament); to have the President appoint the CAG by warrant under his hand and seal; to affirm that the CAG can only be removed from office in like manner and on the like grounds as a Judge of the Supreme Court; and to direct that the appointee shall, before entering office, make and subscribe before the President, an oath or affirmation as set out in the Third Schedule. The debate in the Constituent Assembly and the final wording of these Articles in the Constitution tells us a lot of the exalted perch that the founding fathers gave to the CAG.

This background is essential in order to understand the mischief that may be afoot at this juncture to undermine the independence of this institution while choosing a successor to Mr. Vinod Rai, the incumbent CAG, with whom the Congress Party- led United Progressive Alliance (UPA) government at the Centre has been having a running feud. The Union Government has repeatedly locked horns with the CAG over the last two years because its image has taken a beating over the scams exposed by the country’s supreme audit agency including the ones relating to the conduct of the Commonwealth Games and the scandalous and unfair manner in which 2G Spectrum and coal blocks were sold to private entities. Since they had no credible defence, several ministers in the Union Government and some leading members of the Congress Party have gone on the offensive and tried, without much success though, to accuse the CAG of having a political agenda.

Meanwhile, since the incumbent CAG, Mr. Rai is due to retire in May, 2013, there is a lurking fear that the government may see this as a god sent and try to have a “committed” CAG in place, just like the “committed judiciary” that the Congress Party wanted during the Emergency. This fear is not without basis. In fact, Mr. V. Narayansamy, the Minister of State in the Prime Minister’s Office let the cat out of the bag some months ago when he told PTI, the reputed news agency, that the government intended to make the office of CAG a multi- member body. In that interview the minister had claimed that the government was considering the recommendations made by the V.K. Shunglu Committee on broad-basing the CAG and making it a multi-member body. The minister’s statement, coming as it did in the wake of the financial scandals unearthed by the CAG, caused a political uproar forcing the minister to retract and even claim that he had been “misquoted”. But, this was enough for all to realize that the government’s intentions were to be doubted.

There is a history to these fears because the Congress Party, which enjoyed a two-thirds majority in Parliament in the 1970s, turned India’s democracy into a dictatorship, made drastic constitutional changes to weaken the judiciary and virtually wrecked the independence of many constitutional authorities, including the CAG. The mantra in those days, as stated earlier, was a “committed” judiciary – meaning a judiciary committed, not to the Constitution, but to the Prime Minister of the day Mrs. Indira Gandhi. Similarly, the government, which had imposed the Emergency in 1976, passed orders to weaken the office of the CAG. We have it on the authority of Mr. Y. Krishnan, former Deputy CAG, that until 1976, all papers and documents pertaining to the subject matter under audit scrutiny were made available to CAG and this included secret and confidential records. However, in 1976 the government decided that “only books and accounts need be made available to Audit and it was not obligatory for government to furnish records or papers containing discussions within government, leading to a particular decision or formulation of a particular policy”. Luckily the Janata Party which was voted to power in 1977 repaired much of the damage done to our democratic Constitution by restoring the original articles and deleting the obnoxious amendments introduced during the Emergency. Similarly, the orders passed to weaken the CAG in 1976 were withdrawn and the original authority of the CAG was restored by the Janata Party, which put democracy back on track.

However, it would be unwise to think that these undemocratic tendencies are now part of history, because the ruling dispensation has often laboured to remind us that the Emergency mindset is still alive and kicking. Two recent decisions of the government – the appointments of Mr. Navin Chawla as Election Commissioner and Mr. P.J. Thomas as Central Vigilance Commissioner – go to establish that the Congress Party’s discomfort with healthy democratic norms and independent constitutional authorities persists. The damage that these appointments did to the democratic environment will be discussed a little later.

Meanwhile, if we are to prevent the executive (politicians) from undermining the constitutional scheme, a collegium approach to the selection of the CAG becomes an urgent necessity. The CAG is fully empowered by Articles 148-151 to discharge his functions independently and fearlessly. But if the choice of the CAG is left to the government of day, especially in times such as these, there is every danger of the government choosing a person who is not strong enough morally and ethically to leverage the powers vested in him by the Constitution and act without fear or favour.

Some retired bureaucrats and Members of the Forum of Retired Officers of Indian Audit and Accounts Service have fired the first salvo in this regard by writing to the President Mr. Pranab Mukherjee and the Prime Minister demanding that the need of the hour is a “transparent, institutionalized selection mechanism” for choosing the next CAG.

They have suggested that a Committee headed by the Prime Minister and comprising the Finance Minister, the Lok Sabha Speaker, the Leader of the Opposition in the Lok Sabha, the Chairman of the Public Accounts Committee and the Chief Justice of India or a legal luminary should be constituted to select the CAG. The signatories to this memorandum have also referred to the precedents that now exist for adopting the collegium approach to appoint persons to high offices. They refer to the committees constituted to choose the Central Viligance Commissioner and the Chairman of the National Human Rights Commission Chairman. The same procedure should be adopted to select the CAG, they say. Does this not merit consideration in view of the past record of the UPA?

Grandma’s Remedies for Governance Issues

Dr M N Buch 
(Visiting Fellow, VIF)

I was a stripling short of twenty-three years when I joined as Assistant Collector at Morena after completing my training at the IAS Training School at Metcalfe House. Morena can be frightfully hot in the summer and my training required almost constant exposure to the sun. I developed a bad attack of prickly heat, which turned into an infection which spread through the hair roots and caused me to burst out in painful rashes. I was referred to the Medical College, Gwalior, where I was diagnosed as having a fungal infection for which the doctors prescribed medicines and subjected me to a course of superficial X-ray therapy. This only aggravated my problem, caused my hair to drop out and my skin to become brittle. So much for modern medicine.

One week end I came to Delhi to visit my mother, who saw my condition and advised me to meet an old family friend, a somewhat irascible colonel who had retired from the Indian Medical Service. Col. Kataria was an old fashioned doctor, a wonderful clinician who first diagnosed a disease and only then gave medicine. He had one look at me and wanted to know what I had done to myself. When I told him about the course of treatment I had undergone he shouted that the doctors who treated me were butchers, I did not have any fungal infection but had a relatively simple infection called seborrhoeic dermatitis, which is simply an aggravated form of prickly heat which affects the sebaceous glands. He gave me a cetrimide based shampoo, a lotion consisting of castor oil and lavender oil and an ointment which had both menthol and salicylic acid, which is the main ingredient of aspirin and told me to use these for one week. By the third day the infection began to recede and within one week I was fully cured. The sequence to this was in my next Sub division, Kannod. In the wild and woolly Bagli Tehsil of the Subdivision we had a doctor in charge of the primary health centre, called Dr. Joseph, who hailed from Kerala. When I told him my story he said that if I wanted to avoid any skin infection in the future I should prepare a decoction by boiling a handful of neem leaves, add a mug full to a bucket of water and bathe with it. I followed his advice and, touch wood, have never had a skin problem. I bless Dr. Kataria and Dr. Joseph for curing me with remedies which were virtually herbal. Unfortunately they could not restore the hair I had lost, thanks to the doctors at Gwalior.

One can wonder why I am telling stories about myself and referring to grandma’s recipes in an article aimed at addressing the extremely important issue of governance. Well, sometimes parables and fables convey a far more serious message than scholarly studies and long orations based on theories of politics and the philosophy of government. In other words, in the field of government there is room for grandma’s remedies, or tried and tested methods of administration. This paper attempts to explore these old, reliable systems to see whether we can find solutions for the myriad problems of governance we are facing.

It is the objective of every government to govern, that is, to control and direct the affairs of the country and for this purpose to deliver to the people that which would promote their welfare. Even the worst of dictators has not disagreed with this definition of government because I have yet to come across a dictator who states that he does not desire the welfare of the people. The difference between good government and bad government is a differential view of what constitutes welfare, but on paper at least the objective is to make the country strong, to give people pride, to make people prosperous. When Hitler destroyed the Weimar Republic this is precisely the agenda he placed before the German people and won their confidence adequately to win an election and come to power. What followed is perhaps the most unimaginable of horror stories in the history of the world, but the stated objective still remained the good of the people.

Let us return to India and see the situation here. I refer to the period from when the British took control of this country right up to the present day, when we became an independent, democratic republic. British rule (I refer here to the post 1857 direct rule of the British Government) was based on an understanding that India was a society of laws. British rule was designed to perpetuate, imperial power in India, but the manner of governance was law based and not arbitrary. Therefore, even during the independence movement the British were responsible for maintaining the empire, but always through laws, the enforcement of which also was according to law. Unlike the Gestapo and the Kampetai the police did not have the power of arbitrary arrest and arbitrary sentencing. The police could not hold anyone in custody for more than twenty-four hours without producing him before a Magistrate and the power for dispensing justice lay with Magistrates, Judges and the High Courts and Federal Court, which were not subordinate to the Executive from the sessions court level upwards. The Magistracy and the Police had the same powers then as they have today under the Police Act and the Code of Criminal Procedure in the maintenance of public order and the prevention of offences. The Thanedar and Tehsildar of British days virtually operated under the same laws as we do today, but they were much more effective in ensuring that society remained orderly and crime was controlled and prosecuted. In the matter of law and order every public servant knew where his duty lay and public disorder was dealt with sternly. No officer looked over his shoulder to find out what was expected of him by his official and political masters. If there was a situation to be dealt with the officer on the spot attended to this in the full confidence that he would be supported for his actions. This spilled over into the first twenty years of independence also.

Let me give a few examples. Ambah Tehsil of Morena District had a Tehsildar, P.N. Vats, an outstanding officer by any reckoning. Ambah was one of the worst dacoity affected Tehsils in the whole of India, with many of the gangs being created by issues relating to land disputes. Vats expedited hearing of revenue cases, he was a virtual scourge for his Patwaris if they failed their duty to maintain land records properly and he was extremely pro active in dealing with any case in which land was a bone of contention. He not only brought down pendency of litigation; his activist role actually brought peace to the Tehsil and drastically reduced the incidence of dacoity. He did not wait for orders from his Collector and he certainly did not heed or tolerate any undue political interference in his work. What he wanted was to be effective as an officer and provide good government to Ambah.

The second case is of Inspector Bitta Singh, who was Circle Inspector at Sheopur, then a sub-division of Morena. An extremely ugly dispute broke out over a temple and a mosque and the Hindu Mahasabha was up in arms against the Muslims. The situation was extremely volatile and could have resulted in a major communal riot, which would have spread to the entire region. This outstanding police officer, without waiting for orders from anyone, immediately intervened, arrested those who were trying to foment trouble, launched aggressive patrolling by the police and created an environment in which wrongdoers trembled, peace was maintained and there was no communal riot. The District Magistrate and the Superintendent of Police also played their role by fully supporting the man on the spot, with the administration at sub-division level achieving something which today several battalions of armed police are unable to do.

The third case is of Sub Inspector Maluk Singh, who was the Station Officer of the police station at Nagda. Nagda has a large industrial establishment based on GRASIM. There was trade union militancy which, unfortunately, was fragmented. Suddenly trouble flared up and before the district administration could be fully aware of what was going on the situation became really incendiary in Nagda. Maluk Singh did not have a large force available to him but he suddenly grew ten feet tall and by legal action, threat, persuasion and every other means which lay within law he was able to bring warring factions together, put the fear of God into them, force the management and workers to sit together for a negotiated settlement and he achieved within two days what today massive government intervention cannot do. Peace was maintained at Nagda because of the initiative of this fine young police officer. I am mentioning these three cases because I am witness to what happened both in Morena and in Ujjain, in the former as Assistant Collector under training and in the latter as Collector and District Magistrate. If the man on the spot is trusted and is empowered to act there is no situation in India which cannot be tackled.

There being continuity between the Government of India Act 1935 and the Constitution of India, the only real change which has come about between how the British governed us and how we govern ourselves is that under Government of India Act we were a limited democracy whereas under the Indian Constitution we are a fully democratic republic. In a democracy it is not the bureaucracy which rules but rather the elected representatives of the people who, as members of the Council of Ministers, take the policy decisions relating to government. Nevertheless we continue the old system where the Head of State exercises executive power through officers subordinate to him, the said powers being exercised on the aid and advice of the Council of Ministers. This, however, does not in any way change the old position about India being a country of laws, in which the laws are framed by the legislators but are implemented, within the policy approved by the Council of Ministers, by officers appointed by the President or the Governor as the case may be. The law vests certain powers in officers and these officers are required to exercise their powers freely, fairly, without interference and in accordance with the law. For example, Chapter X of Cr.P.C authorises an Executive Magistrate or a police officer to command an unlawful assembly to disperse and on its failure to do so, to take such necessary action to disperse it as may be called for, including the use of force, even lethal force. The Code of Criminal Procedure does not say that in exercising this power the Executive Magistrate or the police officer will seek the permission of a politician, a superior officer, or any other authority. He has the power, he is required to maintain order; he must ensure that there is public peace and, therefore, he is both free and duty bound to take all necessary action to maintain order.

How does the system actually work? In Bombay the Shiv Sena decides what is lawful and what is unlawful and the police station stands by as a spectator. Every riot is an offence and every mob which indulges in rioting is an unlawful assembly. When communal violence occurs why do police officers not take action as they are authorised to do by the Code of Criminal Procedure? It is not for want of legal authority but rather because the exercise of legal authority is now almost out of fashion. Every police officer, every magistrate knows that if he does take action he will not necessarily be supported, the press will probably come out with a biased view and political pressure will result in action against the officer rather than support for him. Therefore, Magistrates and police officer just do not act because in India acts of omission are still not really punished. It is now very rare to find a Bitta Singh or a Maluk Singh. Instead one finds officers of the type who now man the Maharashtra Police and allow Shiv Sainiks to disrupt the peace, but will not do their duty to prevent this in the interest of the citizen at large.

Law and order is only one aspect of government and at the top end of the administrative pyramid we have the Council of Ministers and the Secretaries to Government who are required to take decisions within the overall umbrella of the Rules of Business of the Executive Government. In Madhya Pradesh, for example, there are the Business Allocation Rules which allocate business between different departments and then there are the Rules of Business of the Executive Government whereby the Governor ordains how the business of government will be conducted. For example, in Madhya Pradesh, there are three categories of cases, those cases which are to be brought before the Council of Ministers, those cases in which before final orders are issued by a department the matter will be submitted in coordination to the Chief Minister and those cases which a department is competent to finally dispose of. Under Part V of the Rules of Business there is a procedure laid down whereby a Secretary or a Minister may dispose of a case. A Secretary is permitted to dispose of every case which is of a routine nature, or on which the question of policy has already been settled, as also of matters which the Chief Minister or the Minister in charge direct the Secretary to finally decide. In other words, in a matter in which there is no issue of policy of issue involved the Secretaries are fully empowered to dispose of the case. Unfortunately no Secretary now exercises this power and instead even minor, routine matters are put up before the Minister. Administratively, therefore, there is a form of paralysis in the higher echelons. As was amply proved in the 2G Spectrum allocation case and as is provided by Rule 48 of the Rules of Business of Madhya Pradesh, the Secretary of the Department is personally responsible for careful observance of the rules. This means that if there is a material departure from rules by anyone, including the Minister, the Secretary to Government is responsible to ensure that the matter is brought to the notice of the Minister concerned and, where necessary, to submit the case in coordination so that the Prime Minister or Chief Minister may be made aware of the deviation and give necessary instructions on the final disposal of the case. The question is, how many Secretaries do actually dispose of cases finally and how many Secretaries have the guts to put up a case in Coordination because the Minister and Secretary do not agree on how other matter should be decided.

There is corruption. Corruption is a criminal offence and under the Code of Criminal Procedure criminal offences shall be investigated by the police. Under section 154 the citizen is required to report the alleged commission of an offence to the police, which is required to treat this as the First Information about the crime and to record it in the specially prescribed FIR book. Once the FIR is recorded then under section 156 Cr.P.C. the officer in charge of a police station is bound to investigate the case and to do this he neither needs permission nor is authorised to abjure investigation. The wordings of section 154 and other provisions of Chapter XII are very clear. The police officer is bound to record a FIR , he is bound to investigate an offence, his investigation cannot be interfered by any authority, he must submit a challan to the court if there is a prima facie case and if no prima facie case is made out he is bound to report the matter to the court and obtain permission to close the case. For this he does not need anyone’s permission, nor can anyone either force him to investigate or refrain from investigating fully or in part. Here is the ultimate grandma’s remedy, contained in the Police Act which dates back to 1861 and the Code of Criminal Procedure which is only a modification of the Code of 1898. The power of the police to investigate is the same in 2012 as it was in 1898. Why, then, do we keep receiving complaints that the police does not act?

The most notorious police force in India is the CBI, which legally has no existence and whose legal avatar is the Delhi Special Police Establishment (DSPE). This force is notorious for acting with political bias, for holding preliminary enquiries prior to registration of the FIR and for acting in fits and starts in eminent cases according to what the political masters dictate. But this is not the scheme of policing in India and, therefore, what we need is not new Police Acts or new police arrangements but rather a reminder to the police that the existing law is complete in itself. It fully empowers the police and the police should not act as handmaidens of individual politicians but rather go back to the old practice of policing according to law.

In every aspect of governance the right way is already prescribed and we do not need new laws in this behalf. For example, tender procedures are fully prescribed in existing PWD manuals. Despite this officers quite often bypass tender procedures, either under pressure of money or the pressure of politics and this has always resulted in cost overruns, poor quality work, non adherence to schedule and generally unsatisfactory execution of the sanctioned work. Why do we need new laws here? What we need is a firm decision both by government and the officers concerned that they will not deviate from established norms, or established rules. For example, The Directorate of Town and Country Planning will not change land use except by due process, for good reason and within the overall scheme of the Development Plan of the city. This does not call for new rules, it calls for the personal integrity and morality of the officer concerned who deals with a situation according to rules and laws and does not succumb to any blandishment or threat or pressure from his superiors. Is that too much to expect?

I am not suggesting that radical surgery or fourth generation drugs should never be resorted to. But if an old fashioned carminative mixture relieves a stomach ache, why should there by resort to expensive antibiotics? Why go to anti allergens and cortico-steroids to deal with an insect bite when in the garden itself there are plants a poultice of which will be enough to deal with the toxic effect of that bite. If by educating officers on what their legal powers are and then encouraging them to take suitable action we can provide good government to this country, why do we need Kejriwal and Prashant Bhushan’s remedies? I would only end by saying that what we need in this country is that officials at every level begin to be aware of their legal powers, the mandate given to them by government and the expectations of the people regarding what government will deliver. We need to empower our officials by assuring them that if they operate within what they are authorised to do, they will be fully supported, if they do not do their duty they will be punished and if they take decisions at the behest of others they will be removed from service. Once this happens and the bureaucracy begins to function effectively all the old remedies of grandmother will flood back and the administration will return to a level of efficiency which it enjoyed in the past. It is then and then alone that we should assess what reforms are needed to carry government to the next level of administrative elevation and for this purpose reform the present structure of government and the network of laws.

A Relook at the Three Pillars of the State: Wisdom by Hindsight

Dr. M.N. Buch

Visiting Fellow, VIF

Of the three pillars of the State, the Executive, the Legislature and the Judiciary the task of the Executive is perhaps the most arduous. The Legislature is answerable only to itself and to the electorate. The Legislature can make and break a government and when this is done by due process it is legitimate. When, however, this is done through dubious means which have come to prevail since 1967, when for the first time legislators were purchased and thus induced to defect, resulting in the legitimately elected governments falling and power passing to those who had purchased it by arranging defections, it is totally reprehensible. The entire history of corruption as it affects us today dates back to that fateful period in 1967 when in States such as Madhya Pradesh, Bihar, Haryana and Uttar Pradesh governments were bought and sold. The legislators suddenly found that they command a price and this could only be paid through the wholesale corruption which became possible only by subverting the State and its institutions. The process brought the legitimacy of government itself into question and it certainly brought the Legislature, both at the Centre and the States, under a cloud which is refusing to lift.

The judiciary is in the happy state of enjoying total autonomy in which whereas there is a hierarchical judicial accountability, there is very little internal administrative accountability up to the level of District Judge and virtually no internal or external administrative accountability so far as the High Courts and the Supreme Court are concerned. Because the process of impeachment of a judge ultimately rests in Parliament, as was proven in the Justice Ramaswami case even a judge found guilty of various misdemeanours by a properly constituted tribunal could not be removed because the Congress Party played foul and the requisite majority for passing of the impeachment motion could not be mustered. Theoretically even if a judge is convicted of a heinous offence and sentenced to a long term of imprisonment he will continue in office if the necessary majority cannot be ensured in Parliament to have an impeachment motion carried. Therefore, the conscience of the judges apart, there is no one on earth to whom a judge of a High Court or the Supreme Court is accountable.

This brings us to the Executive. At the political level the Executive, that is, the Council of Ministers, is collectively responsible to the House of the People under Article 75 (3) of the Constitution, with the House having the power to remove the government by adopting a motion of no confidence. The Council of Ministers advises the President on how the Executive government will be conducted and the Executive government itself then functions as per the Rules of Business approved by the President under Article 77. Incidentally, under Part VI of the Constitution whatever applies to the Central Executive also applies mutatis mutandis to the State Executive. The Executive power vests in the President and he exercises this power through officers appointed by him under Article 53 of the Constitution and Part XIV of the Constitution. The permanent Executive, that is, the officers who implement the decisions of government, is organised into Services under Part XIV of the Constitution, with selection to the Services being done as per the provisions of Chapter 2 of Part XIV. The structure of the Services is hierarchical and, therefore, every official is accountable to his immediate superior and through him right up to the senior most person in his Service or his department. For the organised Services this accountability is virtually daily and continuous and an official who is unable to discharge his duty is liable to disciplinary action. The Conduct Rules, Disciplinary Rules, etc., are all framed to provide a framework within which the Services will act and be called to account for their actions. These officials, therefore, are accountable to their superiors and the ministers and can lose their jobs if they are found to be guilty of misdemeanour after a proper departmental enquiry. Neither the Legislature nor the Judiciary is subjected to this type of accountability, especially at the level of the higher Judiciary.

What are the functions of the Executive government? Under the definition given in the Chambers Twenty-first Century Dictionary one meaning given to the Executive is “the branch of government that puts laws into effect”. This is an excellent definition of the Executive. The implementation of laws, therefore, is the primary function of the Executive and whereas it is the Legislature which gives the framework of laws, it is the Executive which takes all the necessary decisions to implement the laws. A start has to be made with the Constitution itself, which is the fundamental law of the country. Therefore, the Executive has to take action to ensure social, economic and political justice and zealously guard the liberty of the citizen and ensure him equality of status and opportunity. The Executive has to take action to ensure that no citizen is discriminated against on grounds of religion, race, caste, sex or place of birth. It has to ensure that untouchability is not practised and that the protection under Article 19, especially to move freely throughout the territory of India, to reside and settle in any part of India and to practise any lawful profession and carry on any lawful trade or business is fully available to all citizens. The Executive must also strive to make the Directive Principles of State Policy an integral part of the business of government, which means that the Executive must secure a social order for the promotion of the welfare of the people. In other words, the protection of the people and the promotion of their welfare becomes a fundamental duty of the Executive. All this is possible only if there is an environment of law and order, public security and freedom of the citizen from fear. It is the duty, constitutionally and legally, of the Executive to ensure that such a climate of security is created. If one single citizen of India lives in fear then the State has failed in its duty.

Every business house functions with the objective of maximising profit and obtaining the highest possible return on investment. There is nothing intrinsically wrong or immoral in maximising profit, but in business terms it means an excess of income over expenditure. Everything in business is amenable to a cost benefit analysis in monetary terms and that activity which does not yield a monetary profit would come within the definition of bad business practice. The objective of government is to maximise welfare. Welfare entails the health, comfort, happiness and general well-being of people at large, welfare economics means equitable distribution of the Gross Domestic Product to the best advantage of people at large and the promotion of welfare uses welfare economics to maximise the welfare of the citizens. Health care of citizens, provision of social security, development of an educational system which extends the benefit of quality education to the least privileged child, elimination of malnutrition and hunger, providing directly or facilitating gainful employment, providing adequately for the defence of the country against foreign aggression and internal disturbance are all the legitimate concerns of the State in general and the Executive in particular. Many of the measures which are to be undertaken for this purpose will not pass a commercial cost benefit analysis. Quite often welfare is not quantifiable, though there are objective and subjective tests which can help us in determining whether maximum benefit is being delivered by the Executive.

Let us take a few examples Tamil Nadu pioneered the mid-day meal programme and is running the only successful example of this programme in India. Because the programme is being run efficiently over a million children in school get a nutritious diet, the school drop-out rate has substantially reduced and level of nutrition in Tamil Nadu is better than in any other State. It a fully subsidised programme, ultimately paid for by the tax payer. No private business establishment would take up such a programme because it does not yield monetary profit. But what about the social benefit which flows from it? Should not that be taken into account when assessing the programme?

Let us take another programme, that of providing housing and house sites to the poor. The jhugi- jhopdi resettlement scheme of the Delhi Development Authority is an example of providing a house site, with some services to, the squatter population of a city. Certainly the opportunity cost of land given to the squatters is not taken into account and in purely monetary terms people with no legal entitlement are thereby given a house site whose present value is a multiple of what that land cost when it was initially developed. Why only squatter colonies? Almost the entire programme of providing housing for the economically weaker sections, lower income groups and middle income groups, who were provided land and built houses at minimum, affordable cost throughout India has always been a welfare programme. Whole cities have developed because the State provided the development inputs to the cities. The present value of land in these cities and towns and of the land under the areas colonised for EWS, LIG, MIG beneficiaries would run into absolutely astronomical figures before which the estimates of CAG of losses in 2G Spectrum allocation and allotment of coal blocks would pale into insignificance. Are we to apply commercial norms to these welfare decisions of the Executive, ex post facto and to indict them for causing loss? Not if one looks at the duty of the Executive as one to promote welfare.

Let us take another example and that is industrial development. When the process of planning began one of the objectives of government was to create an environment and to provide the land and infrastructure which could promote the development of industry in India. Our major hydro electric and thermal power projects, the huge new capital industries of steel, aluminum, fertilisers, machine tools, etc, were heralded as the new temples of India. All over the world industrial area and estates were developed where land, power, water, roads and other infrastructures were provided to industry at highly subsidised rates. Prior to 1947 India had some industries but was not an industrial power. After 1951 there was no holding back of industry. Would that have been possible if the State had not provided? Would that have been possible had the State not formulated an appropriate policy and the Executive not provided the base on which industry grew?

Our great institutions of learning -- the Indian Institutes of Technology, Indian Institutes of Management, the Agriculture Universities, our magnificent Medical Colleges such as AIIMs, PGIEMR, Chandigarh and Pondicherry, the Indian Institutes of Information Technology, the Central Universities and the State Universities -- would not have come into being if the State had not invested in them and the Executive not created the necessary infrastructure. The intervention of the State and the process of Executive decision making have given India the foundations of a higher educational system which is as good as anything which can be found anywhere in the world. Commercially these decisions may not be viable but the national assets that we have created are beyond valuation.

Let us now go to the other end of the spectrum. Rural electrification by itself, especially in remote areas, is not a commercially viable proposition. However, rural electrification has certainly transformed the agricultural scene because with availability of power lift irrigation throughout the country has become both feasible and viable. Crores of pump sets are lifting water to bring irrigation to fields which would otherwise have remained dry. A subsidy is paid to the farmer by way of cheap power and the State is bearing the subsidy. Can such an Executive decision be faulted because it is probably costing State a great deal on a daily basis? What about the fundamental change which it has brought about in agriculture and the prosperity that it has extended to rural masses in far flung areas?

Very early under British rule, especially after the Crown took over the Government of India from the East India Company and assumed direct rule, it was decided that it was the duty of the government to look after the people in times of famine and scarcity. The Famine Code was drawn up sometime in the 1860s, to be succeeded by the Scarcity Manual which operates even today. The Collector of the District would do an annual or seasonal crop review and determine whether it was a year of scarcity or not. Thereafter relief works would be started and employment provided to indigent rural people. Today the programme is supplemented by such schemes as the National Rural Employment Guarantee Scheme, now renamed after Mahatma Gandhi, the Watershed Management Programme, the Integrated Rural Development Programme and other schemes aimed at improving the rural economy, providing better health care, promoting women and child development and various other schemes for the welfare of the people. These are all programmes mandated at the political level but implemented by the Executive. Are we to stop such programmes because the Executive thereby causes a drain of the public exchequer which is not recouped by commercial means? Even in a purely capitalist, free market economy such as the United States, when the economy began to collapse the government intervened and virtually nationalised banks, investment companies and various financial institutions in order to protect the people. The Executive will continue to take decisions and must continue to do so for promoting the welfare of the people even if it means that valuable land is virtually gifted away and budgetary support for welfare schemes is increased. To bring every decision of the Executive under the scanner of commercial viability is to sound the death knell of effective Executive government.

Even in the two worst cases for which government is facing so much opposition, the 2G Spectrum allocation and coal block allotment, we need to objectively bring the matter into a more balanced perspective. The argument that at a certain stage in the development of our telecommunication system allotment of spectrum without auction was appropriate because if that had not been done mobile telephony would not have achieved the present heights has validity. This issue needs to be looked at objectively and not necessarily through the prism of the audit report. If there is wrongdoing then let us punish the guilty, but let us not reject the policy without understanding all its implications. In the matter of coal block allotment two issues have to be separated. If it is decided to have coal based thermal power generation, then the proposed power station must have captive coal mines. Government through a transparent process can determine the tariff for coal, but no loss as such can be assumed merely because the mine was not auctioned. Without the coal power plants could not have been made operational at Sasan and Chittarangi and there is evidence to believe that these power plants will soon be operational. Every allotment made to a power company or an industry in which coal is an important input, in which the industry has taken all the necessary steps to go into production in the near future, should be deemed to be a valid allotment. Coal blocks allotted to dubious companies which have taken no obvious steps to activate the mine and to use the coal for productive purposes must be cancelled. In every single case where a coal block is allotted on political considerations the allotment should be cancelled. In every case where there is collusion punitive action must be taken, but if as a result of this government stops developing the coal sector it would be a tragedy.

The following lessons have to be learnt from the recent development in which CAG has been active, Parliament is not allowed to function, the press and electronic media have a field day and the Executive has become so scared of its own shadow that government has virtually ceased to function. That is what the Washington Post article literally states. Instead of being annoyed with a newspaper for writing something which is largely true the Government of India should now do a great deal of introspection and take all the necessary steps needed to activate the Executive and to make it function boldly but honestly. Let us cut all favouritism and nepotism out of the system and let the Executive perform its function of promoting welfare and governing firmly and purposefully.