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Government to look into CAG report
Published on 9 Apr. 2010 11:43 PM IST
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Finance Minister Pranab Mukherjee Friday said he would look into the Comptroller and Auditor General’s (CAG) report on alleged mishandling of award of pan-India telecom licences by Telecom Minister A Raja in 2008.
“I haven’t got that report. I will look into it when I get it,” he said, addressing the 25th Accountant General Conference here.
CAG is a constitutional authority and audits all government departments and public sector enterprises every year. Its reports are placed before Parliament, but it is up to the government to take appropriate action on the findings. Raja is accused of issuing new pan-India telecom licences in 2008 at a price of Rs.1,651 crore, which was fixed in 2001 when the mobile subscriber base was 45 million.
The CAG has said many experts had suggested to DoT that the award of new licences should be re-examined as the entry fee had not been revised since 2001. In an FIR, the CBI has also accused some telecom department officials and executives of private telecom companies of manipulating licence terms and conditions.
Mukherjee, who heads the Empowered Group of Ministers (EGoM) on telecom licences, seemed to agree with CAG Vinod Rai’s suggestion that the Telecom Regulatory Authority of India (TRAI) and private telecom operators be brought under CAG’s ambit of scrutiny.
“The CAG office is a constitutional office and is vital for parliamentary control over money and finances. Each of this suggestion will be looked into. Our (government’s) job is to work with close cooperation with the CAG,” he told the conference.
The minister also admitted that the audit has to be based on Accrual-based Accounting and not cash accounting as is done currently. According to the CAG, it would take about five-six years for India to shift to Accrual-based Accounting.
An accrual accounting method measures the performance and position of a company by recognizing economic events regardless of when cash transactions occur. In cash accounting, companies record expenses in financial accounts when the cash is actually laid out and they book revenue when they actually hold the cash in a bank account. Accrual accounting is considered to be the standard accounting practice worldwide.

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