Kapil Sibal
When institutions other than the executive try their hand at
policymaking, the consequences can be disastrous. The Union government is
charged with the responsibility of framing policy and implementing it. The
government is accountable to the people through parliament. The people’s
representatives in parliament can take the government to task for both faulty
policymaking and faulty implementation. This is reflected in proceedings in
parliament through Question Hour and debates under various procedures of the
two Houses of parliament. Government decisions are also subject to judicial
review if they fall foul of constitutional provisions. The executive is,
therefore, institutionally accountable.
Of late, we have
seen constitutional authorities indulging in policymaking. The CAG is a shining
example of this aberration. The function of the CAG under Article 149 of the
Constitution is to audit the accounts of the Union of India and of the states
under a law made by parliament. The CAG is entitled to ensure that allocations
made are duly applied or charged and that all expenditure conforms to the
authority which governs it. The auditor is not a policymaker. Rightly so.
Whether or not a
particular natural resource is to be auctioned is not for the CAG to decide.
That is not an accounting function. The allocation of a natural resource is not
a budgetary allocation; nor does it have any semblance to the application of a
budgetary allocation. The government may decide that a natural resource, in
given circumstances, be distributed in a manner that serves a particular social
and economic objective. If Aakash were to be given free to 11 million children
in higher secondary schools in the country with the objective of empowering
them, it is not for the CAG to comment on such a policy. Of course, the
government would forego revenue. If Aakash were to be priced or put to auction,
it will fetch revenue for the government. But that may not be the government’s
objective. Nor is it within the domain of the auditor to tell us in what manner
government should deal with Aakash. The CAG in the context of his personal
understanding of his authority could raise an audit objection by stating that
government should have charged the cost price of Aakash from all parents who
can afford to pay, and that not doing so has resulted in a revenue loss.
Supposing, the CAG were to do that, what can the government do?
It cannot raise
the issue in parliament because the report of the CAG is to go to the Public
Accounts Committee (PAC) for consideration. The PAC examines audit reports and
prepares draft reports, which are finally adopted by the PAC and presented to
the Lok Sabha. The reports, inter alia, contain a summary of the PAC’s
conclusions and recommendations. Although it is open to the Lok Sabha to
discuss reports of the PAC, such discussions are seldom held though members
often use them in their speeches in parliament on the budget demands for grants
etc. If a specific issue is brought before the House and discussed on a motion,
it is not put to vote. Clearly, the comments of the CAG cannot be effaced
through parliamentary procedures. Nor can its report be challenged in court
because it is not a binding decision. The government has no remedy.
The CAG is not
accountable to any constitutional authority except to the extent that its
findings are the subject matter of consideration by the PAC. In the 2G case,
the CAG’s figures of ‘presumptive loss’ based on a policy option of auctioning
spectrum skewed public discourse. Somewhere in between the truth got lost. The
CAG has now been emboldened to calculate private gain for entities in coal
allocation at the astronomical figure of Rs.1,85,591.34 crore. Yet such audit
reports lead to paralysis of parliament and all legislative business comes to a
standstill. We are in the midst of a constitutional crisis because of the CAG’s
policy prescriptions.
The CAG was
perhaps emboldened by the fact that the Supreme Court, in a recent judgment,
cancelled all 2G licences granted as on January 10, 2008. The court’s
jurisdiction to set aside executive decisions cannot be questioned. Courts,
however, can be questioned when a policy prescription by the court directs that
natural resources be dealt with in a particular manner. Such a policy
prescription by the court is flawed exercise of jurisdiction. The reason is simple.
The court is hardly a forum to deliberate with key stakeholders and formulate
policy. Besides, its prescription of policy is not subject to any form and
manner of accountability. Being the Supreme Court, its judgment is final and
binds us all. In a fractured polity, even corrective legislative measures are
destined to fail. A policy that binds us till the judgment is overturned
suffers from serious lacunae.
Policies by the
executive, as already indicated, are subject to accountability in parliament. A
court’s policy prescription can neither be questioned in parliament nor in a
court of law subject to the possibility of a review, which is available only in
theory. So policy decisions by courts or the CAG are abhorrent to the principle
of separation of powers. Indeed they are antithetical to all we stand for in a
vibrant evolving democracy.
Governments are
not in the business of maximising revenues. Instead of filling its own pocket,
it is obliged, in a welfare state, to create an environment to fill the pockets
of the ‘aam admi.’ Foregoing revenue in 2G helped tele-density and served a
larger public purpose. Instead of the exchequer, the people were enriched.
Auction in 3G enriched the government by fetching over Rs 1 lakh crore, but
since 2010, there is no evidence of the roll out of 3G services. Without the
roll out, bank debt cannot be serviced. The telecom sector is now under heavy
debt. It has not recovered since.
You cannot have
three executives running the government. The consequences of this are apparent.
A vibrant telecom industry has been diminished. On account of the Supreme Court
judgment, the government of India is exposed to litigation under the Bilateral
Investment Promotion and Protection Treaty. Billions of dollars are at stake. Entities
not charged for any wrongdoing found their licences cancelled. Vast investments
were jeopardised. We can ill afford an environment in which investors around
the world feel unsafe in making investments in India.
This is not to say
that courts should not strike down individual allocations. Individual acts of
criminal culpability must be dealt with. Criminal wrongdoing must not be
condoned. The CAG is also entitled to indict the government for misapplication
of funds or for that matter any wrongdoing in not economising or effectively
and efficiently applying budgetary allocations for a particular end. But the
manner in which public assets are distributed for a particular end must be
decided upon by government. Not by the CAG. Not by courts.
The writer is a
senior minister in the Union Cabinet, holding human resource development and
telecommunications portfolios.
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