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Corporate entities need to bring in transparency: CAG Vinod Rai

Comptroller and Auditor General Vinod Rai called for transparency in functioning of corporate entities in a discussion on 'inclusive governance' at the World Economic Forum on India in Gurgaon.

Sebastian P.T. | November 8, 2012 | Updated 14:42 IST

Corporate entities need to bring transparency into their functioning, said Comptroller and Auditor General (CAG) Vinod Rai on Wednesday. He was participating in a discussion on 'inclusive governance' at the World Economic Forum (WEF) on India event in Gurgaon, Haryana.

Since he took over as the CAG in 2008, Rai has given the Manmohan Singh government jitters through his audit reports, including the ones on 2G telecom spectrum and coal mine allocations.

CAG's call for transparency may perhaps be a veiled snipe at Reliance Industries Limited (RIL). Recently, Rai objected sharply to RIL putting conditions on auditing of the production sharing contract between the company and the central government for the KG-D6 block, off the coast of Andhra Pradesh.

RIL apparently wants the CAG to limit its audit to "accounting books and records", and not conduct a performance audit. More importantly, RIL wants the audit report to be kept confidential.

This demand runs contrary to Article 151 of the Constitution, which mandates that every CAG report be tabled in Parliament. The CAG had written to the Oil and Gas Ministry against RIL's "restrictive conditions" to carry out an audit. The issue is yet to be sorted out.

Rai refused to comment on the RIL episode when he was asked about it after the culmination of the WEF session.

"Reduce nepotism and cronyism," he said, during the panel discussion.

The CAG's audit reports have often pointed at alleged irregularities and rule-bending that resulted in a few individuals or businesses benefiting unfairly. Further, to keep the government and corporations accountable, and to fight corruption effectively, he said there was a need to give constitutional status to more institutions such as the Central Bureau of Investigation (CBI) and Central Vigilance Commission (CVC).

"The CBI is not an independent body," he said.

Rai said that earlier, there was "brazenness" in government decision-making, but the Right to Information (RTI) Act had changed that. "We were once transparency averse, but no longer," he noted.

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