New Delhi, November 15
Comptroller & Auditor General Vinod Rai today appeared before the Joint Parliamentary Committee on the 2G Spectrum allocation and denied having overruled his DG (P&T) on audit figures. The CAG, however, explained that a higher authority taking a decision independent of the findings by juniors was a common practice in the CAG office.

A controversy erupted after former DG RP Singh declared that the CAG and Deputy CAG Rekha Gupta overruled his computation of Rs 2,645-crore loss in the 2G Spectrum allocation and arrived at the widely publicised and contentious figure of Rs 1.76 lakh crore.

Singh appeared before the JPC yesterday to reiterate his charge. In spite of denying all charges, in effect the CAG today reportedly confirmed almost everything that Singh had stated. Rai also confirmed that more senior officials had arrived at the figure of Rs 1.76 lakh crore “independently.”

Rai reportedly told the JPC, “It’s a practice in the CAG office that a higher authority can take a decision independent of the recommendations” and claimed precedents and added by way of explanation that, “there are records indicating why DG’s figures were overruled”.

The CAG also explained that he relied upon the Direct Taxes Code Bill, 2010, tabled in the Lok Sabha on August 30, 2010, as well as the Income Tax Act, 1961, to calculate presumptive losses. He was replying to members’ questions on his decision to calculate presumptive losses in the 2G distribution. Curiously the CAG finalised its final draft on May 31, 2010, while the government presented the DTC Bill on August 30, 2010, exactly two months later.

That Bill is still with the Standing Committee and is unlikely to be passed even in the coming winter session of Parliament.

The CAG also confirmed Singh’s charge that he was kept out of the loop in the preparation of the final draft and that the Deputy CAG, Rekha Gupta, issued a memo instructing him to append his signatures on the last page of the report and stated that Singh wanted to read it before that, he could do that in her presence and in her office.

Explaining the reason for this, Rai said the final report was prepared at the headquarters adding, “There were a lot of leakages; so we decided to deal with the whole thing at the central office itself,” and added “After the CAG and Deputy CAG had signed the report, the DG had no choice but to sign it.”

Rai also made the startling admission that the clause of “Potential for revenue generation to the Government,” was unilaterally added by his office after the field reports and DG reports had been submitted on May 31, 2010

Asked why he altered the Objective he said, “I am competent to change it at any stage.”

The CAG also conceded that while his mandate was to audit for the period beginning 2003 and ending 2008, the report merely took into account the 2008 period when A Raja was the Telecom Minister.

The 2003-2004 period was when BJP minister Arun Shourie held the Telecom charge and a total of 55 licenses were issued from 2004-2007. But the CAG only looked at the 122 licenses issued by Raja in 2008.

Rai said, “ The Telecom sector was at a very nascent stage and we sent a letter to DoT to give us the records; but they did not respond and so we did not take this period into account.”