The hullabaloo over the appointment of recently retired Defence Secretary Shashi Kant Sharma as Comptroller & Auditor General of India, succeeding Vinod Rai who bestowed enormous prestige on the post with his fearless auditing of serial scams of the ruling UPA, could have been avoided if the Opposition had been more alert when then retiring Defence Secretary Pradeep Kumar was appointed Chief Vigilance Commissioner after the ignominious exit of PJ Thomas.
Like Shashi Kant Sharma, Pradeep Kumar too, spent many years in the Defence Ministry, serving as both secretary Defence Production, and then Secretary Defence. Though neither officer has been personally named in any scandal, their long tenure in the ministry under two successive UPA governments witnessed a steep decline in India’s defence manufacturing ability; exponential rise in the defence import bill; and a commensurate growth in defence-related bribery scandals.
Officers from such a potentially controversial Ministry should ideally not have been selected for such sensitive positions as Central Vigilance Commissioner and Comptroller & Auditor General. It is pertinent that as Defence Secretary, both men failed to satisfactorily resolve the long simmering controversy over the date of birth of then Army Chief VK Singh, which casts a shadow over their professional competence, if nothing else.
In July 2011, four months after the Supreme Court quashed the appointment of PJ Thomas as CVC for alleged involvement in a palmolein import scandal in Kerala, Defence Secretary Pradeep Kumar was unanimously chosen as CVC by a panel comprising Prime Minister Manmohan Singh, Home Minister P Chidambaram and Leader of Opposition in Lok Sabha Sushma Swaraj.
Kumar had a good academic record and a distinguished career spanning four decades during which he held several prestigious posts including Chairman, National Highways Authority of India; and as Secretary Disinvestment; Defence Production; and Defence. He served on the Boards of leading companies like Bharat Heavy Electricals Ltd., Maruti Udyog Ltd., Andrew Yule Ltd., Hindustan Paper Corporation Ltd., Coal India Ltd., and Neyveli Lignite Corporation Ltd.
At the time of his appointment, however, service veterans privately expressed reservations owing to India’s pathetic record in defence self-sufficiency and excessive reliance on imports. From guns to helicopters to fighter aircraft and army trucks, a scandal tails every defence deal.
Under the UPA, India’s defence import bill has risen exponentially and allegations of kickbacks have surfaced with unnerving regularity. According to a reply tabled in the Lok Sabha by the Defence Minister in March 2013, India’s expenditure on import of weapons/ equipments rose from around Rs. 13,411 in 2009-10 to over Rs. 25,126 in 2012-13 (till February 2013).
At the same time, India’s defence production infrastructure has been in decline. According to the Defence Ministry’s annual report, Hindustan Shipyard Ltd, which posted a profit of Rs 55 crore in 2010-11, incurred a loss of Rs 85.98 crore in 2011-12. The Bharat Earth Movers Ltd, under scrutiny for the Tatra truck controversy, has been sliding downwards for over two years. From a post-tax profit of Rs 222.85 crore in 2009-10, it fell to a meagre Rs 57.25 crore in 2011-12, a fall of 74 per cent in just two years. Similarly, profits of the Goa Shipyard Ltd declined by nearly Rs 100 crore in one year, from over Rs 176 crore in 2010-11 to just above Rs 82 crore in 2011-12. Profits of Bharat Electronics Ltd fell by roughly Rs 30 crore in the same period. The Kolkata-based Garden Reach Shipbuilders and Engineers Ltd also suffered.
After Supreme Court lawyer Prashant Bhushan blasted Shashi Kant Sharma’s appointment as Comptroller & Auditor General as illegal, unconstitutional and likely to be challenged in a court of law, the main opposition Bharatiya Janata Party picked up the refrain. Bhushan pointed out that over the past decade, Sharma had held several sensitive positions in the defence ministry, dealing with significant procurements. Hence, his appointment as CAG involved a conflict of interest and violated the principle of institutional integrity raised by the Apex Court while quashing PJ Thomas’s appointment as CVC.
Had the Opposition observed that similar conflict of interest issues applied to the appointment of Pradeep Kumar, the UPA, then stung by the exit of Thomas, may have searched for a potentially less controversial person. But with no obligation to carry the Opposition along on the selection of a CAG (there are no rules or guidelines for the same), the UPA chose Sharma to audit defence procurements. He would be looking at the period 2003-2010, when he and Kumar held important positions in the defence ministry.
Sharma was Joint Secretary, Additional Secretary and Director General (acquisition) between 2003 and 2010; he became Defence Secretary in July 2011 and was given an extension. This coincides with important defence acquisitions such as the AugustaWestland chopper deal. Now, as CAG, Sharma will audit the very purchases he was involved in.
Under the UPA, India’s defence budget swelled from around Rs 25,000 crore to over Rs 2 lakh crore, making the country one of the most lucrative markets for military business.
Given the furore over the appointment, the Supreme Court on May 23 agreed to hear a PIL challenging Sharma’s appointment as Comptroller & Auditor General of India. The hearing has been set for July, after the summer vacation. The same day, leader LK Advani blunted the Opposition to Sharma’s appointment by attending his swearing-in ceremony at the Rashtrapati Bhavan.
NitiCentral.com, 25 May 2013
http://www.niticentral.com/2013/05/25/the-new-cag-and-a-conflict-of-interest-81747.html
