Two different orders concerning the audit of books, in which the public at large has a crucial stake, were delivered in the last couple of days. Both ought to be welcome. In the first, the AAP Government in Delhi has kept its promise to have the books of accounts of the private power distribution companies audited by independent auditors. Given the deep distrust of the power distribution companies that they cook their books in order to make a case for higher consumer power tariffs, a scrutiny of their accounts by independent auditors will help allay popular misgivings. The new Arvind Kejriwal Government in Delhi has now said that the CAG audit of private electricity companies will be carried out from 2002, when power distribution was first privatised in the national capital. These companies are opposed to the audit and might appeal against the decision in the courts. However, such a course would be suicidal, as the popular mood is firmly with the Delhi Government in this regard. The `aam aadmi’ will find it hard to understand the stand of the private power distributors, as he is bound to ask “if they have no hanky-panky in their accounts, why should they be worried about independent audits.” Trust between power distributors and consumers being of utmost importance, any move by the former to resist independent audit would further incite the demand for the cancellation of their contracts to distribute power. In fact, the Delhi Government has said as much, threatening to take away their licences should they withhold their books from independent auditors. No political party is in a position to oppose the AAP decision to examine the books of the power distributors. In the second case, the Delhi High Court on Monday empowered the CAG to scrutinise the accounts of private telecom companies on the very valid grounds that they share revenue with the government. As per the conditions of their licences, telcos are obliged to pay a varying percentage of their revenues, aside from an annual licence fees. The proposed audit by the CAG is to be limited to the revenue receipts, without extending it to the expenditure side. The telcos had gone to the Delhi High Court, challenging the CAG power to audit their books. The court rejected their appeal. It is not clear whether they would appeal against the Delhi High Court order. Again, transparency requires that the revenue receipts are audited, so that so that the public exchequer gets its due share. There can possibly be no reasonable ground for opposing this straightforward demand, unless, of course, the telcos have been cooking their books. It is to be noted that the court has specifically barred the CAG to confine himself to the audit of revenue receipts alone, thus leaving it to the telcos to spend the money as they want after paying the government its due share. Indeed, this newspaper has all along argued that the books of all the concessionaries of public-private-projects should be mandatorily examined by independent auditors appointed by the CAG on the very sound principle that they too share revenues with the public treasury. Most PPP projects far exceed the cost and time provisions. Besides, they too under-report revenues in order to deny the government its due share. Strangely enough, the lobby group of industrialists has questioned the proposed CAG audit of telcos, arguing that its remit extended only to government accounts alone, not to private companies. This was flawed reasoning.
By agreeing to revenue sharing, the telcos had explicitly conceded the right of the government to examine their books, in order for the latter to ensure that it received its rightful due. And, if the telcos were truthfully sharing revenues, they should have no hesitation in having that fact testified by the CAG. It should be noted that the telcos had themselves insisted on the revenue-sharing model, after the failure of the earlier model, under which they were given licences for each circle through competitive bidding. Now, it is not for them to protest that they are a private company not liable to the CAG audit. Resisting the two audits will further fuel the public distrust of Big Business.