Performance audit of PPP projects to be conducted by CAG soon
Comptroller and Auditor General Shashi Kant Sharma said that the CAG will continue to audit private companies and Private Public Partnership (PPP) projects in cases where revenue sharing with the government is involved, Regretting that economic progress has thrown up a class of ‘rent seekers.
He said while speaking at a conference on corporate fraud, “A report on gas and oil exploration will be presented to Parliament soon. Work on telecom audit is already in progress and I am hopeful that our first report would be ready before the year-end. We will be taking up performance audit of some ongoing PPP projects shortly,”
“In a mature market economy, where there is very little scope for manipulations and fudging, why should companies fear such audit if they have nothing to hide,’’ said Sharma, noting that CAG audit will not cause any discouragement to investors.
“Capitalism based on rent seeking is not just unfair, but also bad for long-term growth. In such an environment, resources are mis-allocated, competition is repressed and dynamic new firms are stifled by better connected players,’’ he said.
Instances when a company or individual use public resources to obtain economic gain from others without reciprocating any benefits back to society refer to rent seeking.
“Many of the corporate tycoons, throughout the emerging economies, are today accused of making fortunes by “rent seeking”. They want to grab a bigger slice of the pie rather than making the pie bigger,” he said, adding that the industries vulnerable to such abuses include banking, mines, telecom spectrum, utilities, oil and gas and public infrastructure.
Sharma said “Our stand has been the same since long.” Although several private companies, especially in telecom, oil and power, have resisted audit by CAG, the Supreme Court in its latest judgment had ruled that any entity using public resources in its business and sharing revenue with the government can be audited by CAG.
Source: Hindu Business Line
banking, CAG, Comptroller and Auditor General, Gas, Mines, oil, Parliament, PPP, Private Public Partnership, public infrastructure, Public resources, Shashi Kant Sharma, telecom, Telecom spectrum, Utilities
