Audit of telecom firms to be completed by year-end: CAG

14 May 2014

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The Comptroller and Auditor General of India said on Tuesday that the first audit report of private telecom companies will be ready by the end of this year.

Private telecom companies had earlier strongly protested that the CAG, the government's accounts watchdog, had no authority to inspect their books as they were private companies.

But on 17 April, the Supreme Court upheld an earlier high court verdict that the CAG can audit their accounts since they utilise national wealth in the form of spectrum, and also share revenue with the government for the same (See: SC upholds CAG's powers to audit accounts of private telcos).

"Work on telecom audit is in progress, and I am hopeful that our first report will be ready before the year-end," said CAG Shashi Kant Sharma at the annual summit of the Associated Chambers of Commerce & Industry of India (Assocham) in New Delhi, where the theme was corporate fraud.

Sharma lamented that economic progress had given rise to some ''rent seekers'' in the corporate world, but sought to reassure industry against victimisation, saying "CAG audits are never aimed to harass private firms, but to uphold the constitutional scheme of accountability."

Any further audits would be taken up keeping in view the risk assessment as well as impact on public interest, Sharma said.

He further said that public-private partnership (PPP) projects where revenue-sharing with the government is involved, will also be audited - "We will be taking up the performance audit of some ongoing PPP projects shortly." (See:  CAG to soon start performance audit across PPP projects )

He also said that a report on gas and oil exploration will be presented to the Parliament soon.

Sharma suggested that the design of contracts be simplified so that incentives to fudge revenue are removed. He also said that law enforcement and regulatory agencies must be strengthened.

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