CAG to soon start performance audit across PPP projects

The Comptroller and Auditor General (CAG) will soon start performance audit of all public-private partnership projects that involve sharing of revenue with the government, CAG Shashi Kant Sharma said today.

He said the CAG will continue to audit private companies and private public partnership (PPP) projects as the number of ''rent seekers'' continue to expand.

The audit, he said, has been necessitated by the new breed of ''rent seekers'' that new economic policies have thrown up.

The ''rent-seekers'' are present across various sectors, including telecommunications, air and seaports, highways, transport and communication etc, he pointed out.

''Work on telecom audit is already in progress and I am hopeful that our first report would be ready before the year-end. A report on gas and oil exploration will be presented to Parliament soon. We will be taking up performance audit of some ongoing PPP projects shortly,'' he said.

The CAG was speaking at a conference on corporate fraud. He said the CAG audit will not cause any discouragement to investors.

''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?'' Sharma asked.

While rent itself is not a bad idea, the CAG pointed out that capitalism based on rent, ''is not just unfair, but also bad for long-term growth, he said, adding, ''In such an environment, resources are mis-allocated, competition is repressed and dynamic new firms are stifled by better connected players''.

These projects involve individual use of public resources to obtain economic gain from others without reciprocating any benefits back to society, he said.

''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.

Private companies, especially in telecom, oil and power, have been resisting audit by CAG, although the Supreme Court had ruled that any entity using public resources to make a profit while sharing revenue with the government can be audited by the government