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Fms Valedictory Address at the 25th Conference of Accountants General

The Finance Minister Shri Pranab Mukherjee delivered the Valedictory Address at the 25th Conference of Accountants General-2010, held from 5th to 9th April, here today. The Conference of Accountants General is held almost every two years to discuss contemporary issues in relation fulfilling the role and responsibilities of the Comptroller and Auditor General of India and transforming the audit as an effective tool for good governance. Following is the text of the speech delivered by the Finance Minister:

I am glad to be here on the occasion of the valediction of the 25th Conference of Accountants General. The institution of the Comptroller and Auditor General dates back to 1860, and I am happy to be with you in the 150th year of its foundation. Your organisation has a key role in the system of Parliamentary financial control and thus in promoting public financial accountability, probity, and transparency.

The nature of the audits undertaken by your organization has evolved from an examination against criteria of compliance with rules and accounting procedures to an appraisal of the performance of departments and organizations responsible for programme delivery. Your reports, apart from providing assurance about compliance issues, now also include recommendation for improving performance and thus add value by way of improving management. I understand that over the last five days, you have had extensive discussions on

various themes relating to transforming the Indian Audit and Accounts Department through consolidation, expansion and innovation in the fields of auditing and accounting. As Finance Minister, I thought I would take the opportunity to highlight some key issues that you might consider focusing your audit priorities on, which would facilitate the effective and economical use of public funds, a goal in which all of us present here today are keenly interested.

Firstly, in the context of the report of the 13th Finance Commission, we would be interested in having your macro and micro-level assessments, at periodic and timely intervals, of the state of public finances, both at the Central and State level. Further, while the Government of India has been allocating and releasing huge volumes of funds for various developmental programmes (which had also received a significant boost as part of the stimulus package to counter the adverse effects of the global economic downturn on the Indian economy), we would like to have your detailed reports on the quality of expenditure being incurred at the grassroots level in implementing these programmes. This is particularly so in view of the vast spread of your audit jurisdiction, covering not only the Central and State Governments and their agencies but also technical guidance and supervision of audit of Panchayati Raj Institutions in most States, which would enable you to follow the Rupee to its ultimate use.

We would also like to have periodic assessments on the implementation of our flagship Plan programmes in different parts of the country, so that Government can take mid-course corrective action, as appropriate, in a timely manner, and optimise the use of public money. In particular, we would like your assessment of how the country is progressing towards fulfilment of the Millennium Development Goals by the targeted date, what is the position in individual States, and what more needs to be done by all of us. I would also request you to analyse the causal link between these multifarious development programmes and key performance indicators, so that we have a better idea of how much value is being derived from each rupee being spent. For example, how much of the change in Infant Mortality Rate or Maternal Mortality Rate is directly attributable to the National Rural Health Mission, or how is Mahatma Gandhi NREGA directly contributing to the reduction of rural poverty and migration Your constructive suggestions would enable us to consider reshaping of programme, as may be necessary.

The focus of the Eleventh Five Year Plan has been not only on growth and development, but on inclusive growth, with equity and justice, to ensure that the fruits of development reach backward and vulnerable sections of society. I would be particularly interested in your assessment of how, and to what extent, our key development programmes are changing the lives of these sections of society. In this regard, I welcome the CAGs initiative in bringing about synergy between his audit and social audit to assess the outcome of our expenditure on social sector schemes.

As you are aware, subsidies on fertiliser, petroleum and food both explicit and implicit impose a high burden on public finances, and reduce the pool of money available for developmental programmes. I would like you to focus on how the expenditure on subsidies can be contained, without adversely affecting the targeted beneficiaries of such subsidies.



In order to maintain the high growth trajectory which was initiated during the second half of the Tenth Plan, improvements to the infrastructural backbone of our country is absolutely essential. Besides promoting growth in the manufacturing and services sectors, such infrastructural improvement also directly benefits the common man through better access to health, education, employment opportunities etc. I would suggest that you consider infrastructure development as one of the thrust areas for your audit activities. In addition to looking at what has happened post-facto, it would help if you could forecast the challenges for projects at the earliest possible point of time, and analyse the risk before the event and not just as lessons for the future.

On the receipts side, I would like the CAG to analyse the areas where there are leakages in Government revenue and recommend corrective measures to increase not only the tax but also the non-tax receipts.

While it is important for all the agencies/Government Departments/PSUs etc. to comply with the rules and regulations it is equally important to ensure that apart from compliance, the funds provided in the budget are used in a manner that fulfils the intent with which these were sanctioned by the legislature. Therefore, it needs to be ensured that all the bodies/departments/PSUs etc. and their systems are result oriented and the management down the line is held accountable for such results. The CAGs comments on the accounts of the public entities/Government should highlight shortcomings in this regard rather than only bringing out instances of non-compliance with rules and procedures.

It is our endeavour to ensure that the reports of the CAG are placed in Parliament/State Legislature in a timely manner and are acted upon expeditiously by the concerned Ministries/Departments. Together, we need to strengthen the Parliamentary financial control by ensuring that funds allocated for a specific purpose are spent for that purpose alone.

I am glad to note that this Conference of Accountants General deliberated on several issues concerning public money, transparency, accountability and good governance. Let us work together as partners towards progress of our country with probity in public life and ethical values as our guiding principles.



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