Officials with the Comptroller and Auditor General on Wednesday said that those questioning the “delay” in the purported audit reports on the demonetisation and the Rafale deal should have known better as the “CAG does not audit the RBI or public-sector banks”.
On the Rafale deal, the officials said the audit was almost three-fourths done and that the CAG hoped to send the report to the President for tabling in Parliament towards the end of the winter session or, at least, before the end of this financial year (March 31, 2019).
The winter session of Parliament is scheduled from December 11 to January 8.
Before an audit report is completed, the CAG has to call an exit conference that allows the ministry or department concerned to offer its final arguments and provide supportive documents.
After the exit conference, it takes at least a month for the CAG to send its report to the President. This month is needed for translation and printing of the report.
On Monday, 60 retired bureaucrats and diplomats had questioned the “unconscionable and unwarranted delay” over the CAG’s audit reports on the demonetisation and the Rafale deal, referring to perceptions about a deliberate go-slow till the general election “so as not to embarrass the present government”.
The CAG is yet to respond officially to the concerns raised in the public letter, but an official said: “Some retired officials who have made a statement on the delay in audit of the demonetisation do not obviously know what they are talking about.”
He explained: “The demonetisation as such can only be audited if the CAG audits the RBI (Reserve Bank of India) because all the action, from the decision (to withdraw all Rs 500 and Rs 1,000 notes) to the printing of new currency notes, were taken at the RBI. The CAG does not audit the RBI and has never been allowed to audit the RBI or public-sector banks.’’
In their letter, the retired bureaucrats had referred to an interview by former CAG Shashi Kant Sharma, where he said the CAG was within its rights to seek an audit of the fiscal impact of the demonetisation — especially its impact on tax revenues — as well as the expenditure on the printing of notes, the RBI’s dividend of the Consolidated Fund of India, the data generated by banks, and the effectiveness of the follow-up action taken by the income-tax department in identifying tax evaders.
Technically, not all the issues Sharma had flagged in the interview fall within the domain of the RBI — some of them fall within the finance ministry’s ambit. As for tax revenues, they are covered by the CAG’s Central Revenue Audit.
When The Telegraph contacted some of the signatories to the public letter to seek their responses to the CAG officials’ counter argument, the retired bureaucrats said they did not want to react to anything that had not been officially put out.