Report on accounting reform held back by govt, says ex- CAG Mehrishi

Rajiv Mehrishi, former Comptroller and Auditor General (CAG), has said the Centre has held back a report he had submitted to the President of India, to end what he called “a nightmare of accounts that militates against good governance.”

“The report is still not in public domain; for some reasons that I don’t know, it is not out for discussions, which disturbs me,” he said, criticising the finance ministry’s decision this year to set up a non-lapsable fund for defence modernisation. Such funds promote corruption, he said in a speech at a seminar this week.

Mehrishi said he submitted the report under Article 150 of the Indian Constitution to the President in April 2020, months before his term as CAG ended in August 2020. As an example of his concerns, he claimed in several central government ministries, 25 per cent of spending is classified as “other expenditure”. “This means you really do not know where the money has gone,” he said. Article 150 of the Constitution says: “The accounts of the Union and of the States shall be kept in such form as the President may, on the advice of the Comptroller and Auditor-general of India, prescribe.” Mehrishi said none of his predecessors in CAG had offered such advice. “We departed from that to give a detailed advisory to the President on how the form and manner of keeping public accounts should be.”

The CAG, as a constitutional figure, takes an apolitical stand in its reports. Mehrishi held high-profile posts in the Narendra Modi government. Before assuming charge as CAG, he was India’s home secretary for two years. Before that, he was made the finance secretary in October 2014 in the first term of the government.

Mehrishi did not commit if his report (a detailed letter with annexes) criticised the government’s subsequent decision to form a non-lapsable fund for capital expenditure in the defence sector. However, he made his objections clear while speaking at the CSEPWORLD Bank seminar, where chairman of the 15th Finance Commission, NK Singh, was also present. “We need to be really careful with non-lapsable funds as they promote corruption and laziness in the ministries which receive this money,” he said. While it is true that due to interference by the courts and the lengthy standard operating procedures, money often reaches the target late, “non lapsable funds as a solution scares me.” He said the trend could intensify “after instituting such funds for North East and defence. He added, “I do not know where it will go next.” Finance ministry did not respond to an email from