The Comptroller and Auditor General (CAG) are now offering their opinion on the free-gifts controversy that Prime Minister Narendra Modi’s “revdi culture” jab sparked, which has already drawn the attention of the Supreme Court and the Election Commission. This ongoing freebie debate has grabbed the attention of CAG now, where discussions are taking place to solve this issue.
Is freebies a threat to development?
To deal with the issue of freebies, the election commission called members from every legitimate political party to help create standards for giveaways mentioned in election manifestos.
According to electoral officials aware of the situation, political party leaders reacted angrily at the meeting, stating that it would be a violation of their rights. However, encouraged by the Supreme Court’s ruling in the Subramaniam Balaji vs. Tamil Nadu government case, the Election Commission continued and in February 2014 added a new charter to its model code of conduct. This gave the commission the authority to hold a party accountable if its manifesto failed to justify a specific promise or failed to detail how the necessary funds would be raised to fulfill it.
Read more:- https://indianexpress.com/article/india/after-ec-now-cag-works-to-red-flag-freebies-state-largesse-8225594/
The EC’s ability to combat giveaways has remained hazy and constrained. The EC only used its authority in a handful of circumstances. The free-gifts controversy has come up again before the high court nine years later. Prime Minister Narendra Modi’s comment that the revdi culture was a danger to the nation’s progress in the middle of July brought the problem to light.
CAG on freebies debates
Freebie refers to something that is distributed without charge. According to the Election Commission of India (ECI), the terms “freebies” and “irrational freebies” are subjective and susceptible to interpretation and lack a definite meaning.
During election season, politicians frequently promise voters freebies and growth in exchange for their support. But when Prime Minister Narendra Modi disparaged Opposition parties and threatened the public, this was brought to light.
According to The Indian Express, the CAG is looking into creating criteria that will “red-flag” the burden of subsidies, off-budget borrowings, discounts, and write-offs that could be problematic for state economies.
Sources claim that during the Audit Advisory Board (AAB) meeting earlier this week, the topic of states’ “financial sustainability” was discussed. The body receives “suggestions” from the board, which is led by CAG Girish Chandra Murmu, on issues about “audit, including coverage, scope, and prioritization of audits.”
Why is there a need to look into the Freebies debate?
On Tuesday, Nirmala Sitharaman, the minister of finance, stated that the topic of giveaways needs more discussion. She also discussed the effectiveness of Indian institutions, saying that while there has been a justification for creating a Fiscal Council, the current institutions have excelled in times of crisis, particularly during the most recent COVID-19 pandemic.
Sitharaman said there is a need for a broader debate on the issue. “She was addressing during a discussion about the book “Recalibrate: Changing Paradigms” by the Finance Commission Chairman NK Singh and the Principal Secretary to the Prime Minister, PK Mishra, at the Delhi School of Economics. Speaking outside the event, Mishra stated that while there is much discussion about freebies, it is important to discern between what is necessary for the welfare and improvement of people’s economic circumstances.
When questioned about the rate of inflation, Mishra responded that it cannot be viewed from a one-dimensional perspective and that a comprehensive approach must be adopted for policy reasons.
Who is working on the freebies issue?
The top authority in charge of conducting internal and external audits of federal and state government spending is India’s Comptroller and Auditor General. Currently, CAG consists of 10 external members make up the 21-member board, which is led by Murmu: Agriculture economist Ashok Gul, Dr. Devi Prasad Shetty, chairman and executive director of Narayana Health, retired IAS officer H K Dash, academic Makarand R. Paranjape, chairman of Team Lease Services Manish Sabharwal, retired Indian Army officer Maroof Raza, a fellow at TERI Nitin Desai, economist Ravindra H. Dholakia, Central Vigilance Commissioner Suresh N Patel, and retired IAS officer S M Vijayan.
According to sources, the meeting examined how most governments face a “revenue deficit” as a result of the pandemic and how these states are unable to control their spending with their revenue resources.
The leading auditing organization is also examining the states’ upcoming six-year repayment obligations. “We have seen that the majority of the states
However, the proposed mechanism will also focus on off-budget borrowings, discounts, and write-offs. The CAG has been highlighting issues related to subsidies and other expenditures in the states’ budgets.
The audit agency has accumulated information on the “relative position of debt, borrowings, subsidies—whether they are freebies or not,” guarantees, and their sustainability,” according to sources.
“We are going pretty rigorously from the current year,” the person stated. We claim that this cannot continue. Whatever you do, your money management will become chaotic. You won’t be able to continue like this, and the state will face difficulties.
Currently, audit agencies examine subsidies, although remission and relaxations are not included in subsidies. For instance, the CAG “sometimes but not consistently” records aspects like loan waivers, money paid to discoms, and interest subvention on loans.
Solution for freebies debate?
When asked about the CAG’s possibilities, the insider responded, “We plan to raise a red flag. We occasionally sharpen our observations, and after this Audit Advisory Board submits its recommendations, we’ll consider what else we can do.
The meeting also included a request to investigate the variety of freebies available. States give away items like televisions, laptops, bicycles, grinders, and mixers. There are some things that the subsidy does not take into account. Therefore, we must establish criteria on how to capture them, according to the source. The financial resources of the states were also discussed.
It is learned that “atmosphere per cent of work on the accounts for the financial year 2022-23 has already been done,” said a source. “So we will see what we can do at this stage
