Vinod Rai

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Vinod Rai
Vinod Rai at the World Economic Forum on India 2012.jpg
Vinod Rai at the World Economic Forum on India 2012
Born (1948-05-23) 23 May 1948 (age 66)
Parasa Uttar Pradesh
Nationality Indian
Education Masters of Economics (University of Delhi),
Masters of Public Administration (Harvard University)
Alma mater Hindu College, University of Delhi
Occupation ex-Comptroller and Auditor General of India
Known for Audits on 2G spectrum allocation, Coal allocation
Title ex-Controller and Auditor General of India
Predecessor VN Kaul
Successor Shashi Kant Sharma
Children 3
Website
cag.gov.in

Vinod Rai (born 23 May 1948) was the 11th Comptroller and Auditor General of India. He assumed office on 7 January 2008 till 22 May 2013.[1][2] He is the current chairman of UN Panel of External Auditors. He holds a Masters Degree in Economics from the University of Delhi, and Masters in Public Administration from Harvard University. He is widely considered as symbol of the anti-corruption movement[3] and is credited with having turned the office of CAG into a powerful force for accountability and transparency in contemporary India.[4]

Early life and education[edit]

He was born In Hajipur ,Varanasi Uttar Pradesh. He did his schooling from Vidya Niketan - Birla Public School, BPS Pilani Rajasthan[5] and graduated from Hindu College, University of Delhi. He has a Masters Degree in Economics from Delhi School of Economics, University of Delhi and Masters Degree in Public Administration from Harvard University, USA in 1988. He chose to study Financial Administration at Harvard Kennedy school in 1987 while he held the position of District Collector and Magistrate in the state of Kerala, India.[6] He is married and has 3 children.[7]

Career[edit]

Rai is a 1972 batch Kerala cadre officer of Indian Administrative Service (IAS).[8] He started his career as the sub-collector of Thrissur District. Later, he became the Collector and spent his eight years of career in Thrissur City. He was called the second Sakthan Thampuran for his role in the development of the Thrissur City.[7] He was the MD of Kerala State Co-operative Marketing Federation from 1977 to 1980.[2] Later he was appointed as Principal Secretary (Finance) in the State Government of Kerala. He had served senior positions in the Ministries of Commerce and Defence, Government of India. Prior to his appointment as CAG, he served as Secretary, Financial Services and Additional Secretary in the Banking Division including banks and insurance companies under Ministry of Finance.[9]

Rai was instrumental in setting up the India Infrastructure Finance Company and was also on the Board of this company. Apart from serving in both, state and union governments, he has been a Director on several Boards including the State Bank of India, ICICI Bank, IDBI Bank, Life Insurance Corporation of India and Infrastructure Development and Finance Company of India.[10]

United Nations Panel of External Auditors[edit]

He was chairman of United Nations Panel of External Auditors and member of the Governing Board of the International Organization of Supreme Audit Institutions (INTOSAI).[11] The United Nations Secretary-General Ban Ki Moon has appreciated the panel and the yeoman service rendered by the external auditors in improving governance in the United Nations system.[11] The panel headed by Vinod Rai discussed the major business transformations currently under way in the United Nations with Secretary-General Ban Ki Moon.[11] The Panel of External Auditors plays an important role in promoting accountability and strengthening governance mechanisms in the UN organisations.[11] Mr. Rai has taken over as the chairman of Governing Board of the Asian Organization of Supreme Audit Institutions (ASOSAI) on 29 February 2012.[12]

CAG of India[edit]

Forbes described Rai as being among that rare breed of civil servants who knows how to get work done in the government.[13] A former colleague says Rai has an uncanny ability to cut through red tape.[13] He was appointed as Comptroller and Auditor General of India with the backing of finance minister P. Chidambaram.[14] But he has served up uncomfortable audit reports that have pinned many government departments beyond the baseline.[13]

He has consistently hit the headlines for his unforgiving audits, ranging from the scathing report on the shoddy preparation for the Commonwealth Games to the latest on spectrum allocations for second generation (2G) telecom services.[13]

Along with a vibrant media, an activist Supreme Court and an increasingly vociferous civil society, his supporters say, Rai has made his office into a powerful force for accountability and transparency in modern India.[15]

Reforms suggested by Vinod Rai[edit]

Vinod Rai recommended that all private-public partnerships (PPPs), "Panchayti Raj Institutions" and societies benefiting from government funds should come within the ambit of the CAG. The PPP model is a popular medium for the execution of infrastructure projects worth millions of rupees, and these projects are not audited by the CAG. 60 percent of government spending does not currently come under the scrutiny of the CAG.[16] [17]

Major Audits[edit]

2G Spectrum allocation[edit]

Main article: 2G Spectrum scam

He is widely credited for the report on issue of Licences and Allocation of 2G Spectrum by United Progressive Alliance government which resulted in a huge controversy in India. The report estimated that there was a presumptive loss of INR1766.45 billion (US$29 billion).[18] In a chargesheet filed on 2 April 2011 by the investigating agency Central Bureau of Investigation (CBI), the agency pegged the loss at INR309845.5 million (US$5.0 billion)[19]

On 2 February 2012 the Supreme Court of India on a public interest litigation (PIL) declared allotment of spectrum as "unconstitutional and arbitrary" and quashed all the 122 licenses issued in 2008 during tenure of A. Raja (then minister for communications & IT in United Progressive Alliance) the main accused.[20] The court further said that A. Raja "wanted to favour some companies at the cost of the public exchequer" and "virtually gifted away important national asset".[21]

However, the Presumptive Revenue loss calculation has never been established and has at best remained a conjecture .On 3 August 2012 when according to the directions of the Supreme Court, Govt of India revised the spectrum price to Rs 140 billion as reserve price for 2G spectrum and decided to sell airwaves in Delhi, Mumbai, Karnataka and Rajasthan for 1800 MHz band, and pan India for the 800 MHz band the response was poor to say the least . The Government then announced that it would auction the unsold spectrum in the 1800 MHz band from the 2012 spectrum auction, immediately after the first round, which began on 11 March, got over to comply with a Supreme Court order. The government also reduced the reserve price for 1800 MHz by 30% and for 800 MHz by 50% from the 2012 spectrum auction.Response to the 2013 spectrum auction was also very poor. While there were no bidders for spectrum in 1800 MHz and 900 MHz bands, MTS India was the only bidder for airwaves in 800 MHz band. Airtel and Idea were reluctant to participate in the spectrum auction for due to steep pricing of the auction.

The main criticism to the report now emerging is that the CAG exceeded its constitutional mandate as it attempted in a sense to change the policy of the Government of India which at that point was to promote telecom growth and not revenue maximisation by arguing that spectrum could only be sold by auction and creating figures for Presumtive losses around it .However,the Honble Supreme Court Of India in the Presidential Reference (2012) has upheld the right of the Government to frame policy and said "The norm of “common good” has to be understood and appreciated in a holistic manner. It is obvious that the manner in which the common good is best subserved is not a matter that can be measured by any constitutional yardstick - it would depend on the economic and political philosophy of the government. Revenue maximization is not the only way in which the common good can be subserved. Where revenue maximization is the object of a policy, being considered qua that resource at that point of time to be the best way to subserve the common good, auction would be one of the preferable methods, though not the only method. Where revenue maximization is not the object of a policy of distribution, the question of auction would not arise. Revenue considerations may assume secondary consideration to developmental considerations. " 1

CoalGate (Coal Mines Allocation)[edit]

Main article: Coal Mining Scam

Delhi Commonwealth Games 2010[edit]

Padmanabhaswamy Temple Audit[edit]

Based on the recommendations by amicus curiae-senior advocate Gopal Subramaniam who was investigating the issues of financial irregularities and mismanagement in the Padmanabhaswamy Temple, the Supreme Court of India issued an interim order on 24 April 2014 stating that Mr Vinod Rai will supervise special audit of property of temple. Rai responded by saying that he felt "very humbled" and said "With all sincerity I will take up the task".

Confrontation with Governments[edit]

As a part of his duty, Rai has many a times raised questions on faulty policy making of several state governments and Union government run by Congress led United Progressive Alliance and BJP led Governments in Chhattisgarh and Gujarat. He had slammed the Union government in the allocation of spectrum for 2G mobile use to telecom operators, conduct of the 2010 Commonwealth Games, running of its flagship rural employment guarantee scheme and the spending by Reliance Industries in an oil block. He had also pointed out improprieties in allocating coal blocks, and Union government's overt generosity to GMR in an airport project and Reliance Power in a power plant.[22] CAG slammed govt of Goa for forest policy delay,[23] Haryana govt for loss of over INR10 billion (US$160 million) due to "deficiency" in imposing taxes like sales tax on goods, stamp duty and registration fee in land deals and taxes on vehicles in more than 4,000 cases in a year.[24]

There are certain times when ministers of ruling Congress coalition government criticised CAG. Minister of state in PMO, V. Narayanasamy said "CAG has no authority or right to comment on the policy of the government but unfortunately it has questioned its authority, which is totally unwarranted and against the mandate given to them".[25] However CAG Vinod Rai defended his position by stating at an Economic Editor’s Conference in 2011 "I am making it clear that I do not think the CAG is exceeding its jurisdiction, because the basic responsibility of the CAG is to identify if there is any lapse." and challenged the government to identify the specific breach of mandate.[26]

Awards and recognition[edit]

Year Name Awarding organisation Ref.
2012 Alumnus of the Decade Hindu College, University of Delhi. [27]
2013 Civil Servant achieving Excellence in Public Administration Mannapuram Finance Limited
2013 Outstanding contribution to the Indian economy CNBC TV18

He figured as one of the Persons of the Year in Forbes magazine January 2011.[28]

In December 2011, he was chosen as the chief of UN external audit panel.[29][30]

In February 2012, CAG was complimented for professionalism, training and infrastructure by its US counterpart.[31]

Quotes[edit]

  • "We are incapable of making fundamental errors as being discussed in media. Our report will make clear all doubts on fallacies (that are) being talked about." - Vinod Rai at a seminar on 'Public Accountability and the Role of CAG' organized by the Institute of Public Auditors of India at New Delhi on 28/03/2012.
  • "We are not in the business of finding faults. But when we detect some loopholes during the process of audit, we advise the executive to plug those loopholes." - Vinod Rai at a seminar on 'Public Accountability and the Role of CAG' organized by the Institute of Public Auditors of India at New Delhi on 28/03/2012.
  • "They (CAG auditors) are the best in the world. Both developing and developed countries send their auditors to train with us at our academies. Effectiveness and robustness of our processes have led us to being appointed auditor for global agencies." - Vinod Rai at a seminar on 'Public Accountability and the Role of CAG' organized by the Institute of Public Auditors of India at New Delhi on 28/03/2012.
  • "We cannot do the role of cheerleaders. We strive to provide objective feedback on the functioning of the various departments of the government." - Vinod Rai speaking at the inaugural function of a Conference of Accountants General.[32]

References[edit]

  1. ^ "Mr. Vinod Rai". Archived from the original on 2 July 2011. Retrieved 2 July 2011. 
  2. ^ a b "Vinod Rai appointed CAG". The Hindu (Chennai, India). 18 December 2007. Retrieved 14 November 2008. 
  3. ^ 'Debate the quantum but don’t deny there’s been a loss'http://www.thehindu.com/news/national/debate-the-quantum-but-dont-deny-theres-been-a-loss/article4684327.ece
  4. ^ "Know the new CAG of India: Shashi Kant Sharma". Hindustan Times. 23 May 2013. Retrieved 16 September 2013. 
  5. ^ "Vinod Rai to be new CAG". Business Standard. 17 December 2007. Retrieved 14 November 2008. 
  6. ^ "CAG Vinod Rai at Harvard Alumni Meet". Hks.harvard.edu. Retrieved 16 September 2013. 
  7. ^ a b "Officials recount Thrissur stories". Thehindubusinessline.in. 11 July 2005. Retrieved 16 September 2013. 
  8. ^ "Vinod Rai appointed as CAG". Business Line. 18 December 2007. Retrieved 14 November 2008. 
  9. ^ "Vinod Rai appointed as CAG". Business Line. 18 December 2007. Retrieved 14 November 2008. 
  10. ^ "CAG of India Sh. VInod rai". 
  11. ^ a b c d Press Trust of India (12 December 2012). "Vinod Rai re-elected as Chair of UN auditors panel". Business Line. Retrieved 1 January 2013. 
  12. ^ "CAG of India Sh. Vinod rai". 
  13. ^ a b c d Dinesh Narayanan (1 July 2011). "A Person of the Year: Vinod Rai". Forbes. Retrieved 1 January 2013. 
  14. ^ Aman Malik and Cordelia Jenkins (2 April 2013). "Vinod Rai: Auditor or crusader?". Livemint. Retrieved 16 September 2013. 
  15. ^ Simon Denyer (28 December 2012). "India’s chief auditor leads battle against corruption". The Washington Post. Retrieved 1 January 2013. 
  16. ^ http://newwaveindia.com/vinod-rai/.  Missing or empty |title= (help)
  17. ^ Published, Prahlad (21 May 2013). "After shaking and hurting the govt he is retiring - News Oneindia". News.oneindia.in. Retrieved 16 September 2013. 
  18. ^ "Performance Audit Report on the Issue of Licences and Allocation of 2G Spectrum". Retrieved 5 January 2012. 
  19. ^ "2G loss? Govt gained over Rs 3,000cr: Trai". The Times of India. 7 September 2011. 
  20. ^ "SC quashes 122 licences". The Times of India. 2 February 2012. 
  21. ^ "2G verdict: A Raja 'virtually gifted away important national asset', says Supreme Court". The Times of India. 2 February 2012. 
  22. ^ "CAG Vinod Rai: An accountant who’s calling government to account- The Economic Times". 
  23. ^ "Comptroller and auditor general of India slams govt for forest policy delay- Times of India". 
  24. ^ "Haryana loses Rs 1,000cr due to deficiency in imposing taxes: CAG - Times of India". 
  25. ^ "CAG overstepping its constitutional mandate: Govt". 
  26. ^ "CAG challenges government to identify specific breach of constitutional mandate". 
  27. ^ "Democracy at Crossroads, Debunk Silent Majority: CAG". Outlook. Retrieved 1 June 2012 (2012-18-01).  Check date values in: |accessdate= (help)
  28. ^ Narayanan, Dinesh (7 January 2011). "A Person of the Year: Vinod Rai". Forbes. 
  29. ^ "CAG Vinod Rai elected U.N. external audit panel chief". 8 December 2011. Retrieved 28 February 2012. 
  30. ^ "CAG Vinod Rai to head UN audit panel". 9 December 2011. Retrieved 28 February 2012. 
  31. ^ "CAG receives pat from US counterpart". 27 February 2012. Retrieved 28 February 2012. 
  32. ^ "CAG: We can’t don the role of cheerleaders". The Indian Express. 0 October 2012. Retrieved 8 October 2012.  Check date values in: |date= (help)

33. Vinod Rai: The Diary of Nation's Conscience Keeper-NOT JUST AN ACCOUNTANT.