‘Govt Should Encourage Enterprises, Not Particular Entrepreneurs’

Sipping a glass of lassi, Vinod Rai looks relaxed even as workers put finishing touches to the third-floor apartment he has moved to after retirement in Delhi’s upscale Vasant Vihar neighbourhood. The uncluttered decor of the drawing room echoes the clarity in approach that has been the hallmark of the former Comptroller and Auditor General of India. This trait was evident when he resisted pressure from the political class to retract the CAG reports on mega losses due to the sale of spectrum, allocation of coal mines and many PPP projects. Excerpts from an exit interview with Lola Nayar:

You have had a long career as an administrator. What did life teach you that your professional courses did not?

Number one, that there are absolutely no short-cuts in life. Number two, that professionalism and objectivity pay in the long run. There is just no way you should be taking short-cuts at any point of time to meet your own narrow personal objectives. You should furrow a straight path for yourself. If you have done that, there is no way the world can keep a good man down. I learnt that in Kerala where the UDF and LDF (groups) alternate in government. All my colleagues who were objective and professional in their dealings and didn’t take sides have excelled throughout their careers.

What changes would you desire in professional courses to help students prepare better for the job market?

I find some of the training programmes too academic, they are kind of laboratory procedures. When you are talking about financial markets, there is no such thing as a laboratory process, it is a real-life situation. And real-life situations you can learn to deal with only if you have studied previous real-life situations and how they have panned out, which means case studies. While theory is important, the real learning process is through case studies. That has to be inj­ected into the system. One important thing I have felt is that we have bec­ome a nation that is content being mediocre. We have forgotten the pursuit of excellence. In our training programmes and education, we must instil into everybody that he or she has to be at the top of the ladder and not be content with being on the second rung. Which means the ‘chalta hai’ attitude has to be given up.

As a bureaucrat, how did you juggle the pressu­res from your seniors and political bosses to be on the right path?

The political system perhaps has its favourites, but at the same time they need somebody to deliver their objectives, their schemes and their manifestos, whatever it is, once they come into government. For this, they require performance. Now you have to reckon with yourself. You have to reckon that you are a performer, not going to take sides and you will put in your best in delivering whatever is the objective of the programme. Once you have decided that, then pressures don’t matter. And the best thing about the politician is that he is an excellent judge of human nature and man management. Number one, he will not try to bend you more than you can bend. Number two, he also has his objectives in terms of the sheer content of work and his policy has to be implemented. And if you are a doer, he will support you.

The 2G gallery Telecom executives walk out of jail after bail

In the context of Coalgate and spectrum allocation, it is the top bureaucrats who have been held responsible....

The biggest freedom we (the bureaucrats) get is security of tenure or security of job. Now nothing stops us from putting what we feel on paper, creating a record and leaving it.

But papers are known to disappear....

No, that is wrong. You can keep a copy if you are scared it will disappear. But papers don’t disappear in a government system. I have not come across a single instance where I have penned my views on a critical issue and it has disappeared. In the system of office management that we follow in government, there are so many records that it is very difficult to fudge anything. Now, nothing stops the secretary from saying what he feels. The minister may or may not accept his views. If he does not, he may say so.

Some people may say he (the minister) may take it out on you. But what can he do? He may throw you out of that dep­artment. So what? How many times will they throw you out? And all said and done, the minister also wants correct advice. All those places where secretaries or bureaucrats have not given correct advice, both the minister and the secretary have come a cropper. Once he has got the correct advice, then it is up to the minister to take a decision.

In the case of coal block allocation, what is the fault we found—the minutes were not reflecting the record. All we have pointed out are the good guidelines along which the allotment should have been done. Of the 17 applicants for three blocks, why only three got it, nobody knows. If they had recorded the reasons, nobody would have been in difficulty today.

Fingers are often pointed at powerful industrial groups like Reliance for a lot of the flaws in the system. Are they really the culprits?

No, I don’t believe it at all. I will tell you why. We give out a signal that we are not going to be following a system that is transparent and objective and that is why we encourage people to jump the queue. I think we need to trust the business community, we need to trust corporates, and if we need to trust them, we need to see ourselves in the light of facilitators. Unfortunately, what has happened in India is that a climate of distrust has been built up and that is why we go wrong. I bel­ieve the government should be seen to be encouraging enterprise in general and not particular entrepreneurs. This means, I wish to encourage power projects, but not any particular individual’s project. Whichever is the superiormost, let us go in for that.

Now that you have demitted office, what do you think should be the CAG’s role?

One, the government has to accept, there has to be an oversight agency which will function the way the constitution-makers mandated it to function. On the CAG’s part, it should play a positive role, not an adversarial one—not point out only the negatives of the government functioning or its schemes. In case we are pointing out a mistake or shutting a door, we should open a window, and say this is not the way to do it, instead, this is the way it should have been done; in effect, give a suggestion or recommendation. We must acc­ept that there is no ‘we’ and ‘they’, and we are all on the same side of the governance system.

Was this the most challenging role of your career?

In a large number of ways, it was very challenging because I am not a trained auditor. Number two, it was difficult to bring about an acceptability of the mandated role of the audit department. In some ways, it has been accepted that this is indeed the mandated role. There were some naysayers to that but hopefully it has been accepted as it is the global practice and we have got to bear what is the globally accepted practice.

Have you had second thoughts about the telecom or Coalgate loss figures?

We have never had second thoughts about those figures. We genuinely bel­ieved those figures had to be put out and they were part of the audit process. But we have also said you may accept them or not accept them—but we have given the logic of why we arrived at those figures. Nobody who has countered us has given us his logic. There have been any number of persons from the government who have said there were no losses in spectrum sales. Fine. If there were no losses, why was the prime minister saying please index the 2001 price to the present price? It was not done. So, if the prime minister himself was asking them to be indexed to the present price and it was not done—it had obviously been sold at a suboptimal price. Secondly, the fin­ance ministry was saying, please follow a market discovery process of that price, which was not done either. If these two critical wings of the government are saying follow a process and that advice is ignored by the DoT, then how can you say there have been no losses?

Subsequently, we did not see the expected response or realise the expected price in further spectrum sales. In the light of that, would you say you have overestimated the demand, the market price of spectrum and the loss?

Certainly not. Every market discovery process is within a time-frame. What was the Sensex in 2008 or 2010? Was it the same as in 2013? Were the liquidity conditions the same? Were the market size and environment the same? So you just cannot compare them and say we did it in a particular way in 2008 and five years later have not been able to realise the same gains. We feel the potential was much, much more in 2008 as it was a nascent market. It was exploding at that time. Now it has almost tapered.

During your stint as CAG, you have been interacting with fresh recruits to the audit service and visiting various institutions. How job-ready are the fresh recruits?

I would like to split this into two parts, particularly as you have referred to the audit service. Whenever I have spoken to my audit people, I have told them they have to prepare their core competence—audit per se. At the same time, audit in a certain environment. We in the audit department can no longer afford to sit in a silo which is cut away from the rest of the world. I have also been telling them to ensure that their core competence, which is the auditing skill, is not developed in an adversarial fashion.

As regards other things, I have found the youth more tech-savvy. Thanks to the internet and globalisation of everything, including knowledge, they are far more aware of what the world has to offer. At the same time, compa­red to my generation, which 50 years back had to decide between government, engineering or medicine, or at the most, SBI probationary officer, today the menu of options is absolutely humongous as far as they’re concerned.

I have been telling them that they are a part of society and must ensure that they give society more than they draw from it—this means a process of accretion rather than degradation. For example, people who have been provided some education must ensure that they spread education. At the same time, I have been telling them that the sheer pursuit of one’s own material requirements is too much of a self-centric policy and that is where inter-personal skills will have to be honed such that you gel within society and are part of a homogeneous and holistic group.