Editorial

Public Audit

Undoubtedly, everybody is eagerly waiting for the budget, only to see what are the new taxes, what are the new reliefs or personally to what extent additional tax is payable – whether direct or indirect. The eagerness and concern we show for levy of taxes is understandable, but what I really do not understand is why we are not showing similar concern, if not more, in respect of the utilisation of the amounts collected by way of taxes by the Government. After all, tax collection is for meeting certain legitimate expenses of the Government. Not only for collection of taxes, for utilisation of the taxes also, the Government has to act according to law. The amount which is collected by way of taxes must be wholly and exclusively used for the purposes for which spending of the tax is authorised.

It is an open secret that there is a lot of wastage in Government’s spending. Not only, spending must be strictly according to authorisation, but such spending must be properly accounted for. In a democracy, it is the responsibility of the people to see that the Government does not waste the funds and it uses the funds properly and economically. We are very much concerned when a particular tax is to be levied and a big hue and cry is raised when some additional tax is levied or tax rates are increased, but why do we not show a similar concern when a particular amount in the budget is earmarked for a particular purpose, is not properly utilised? Have we not to analyse whether the funds those are earmarked for certain particular purposes are properly and economically spent for the purpose for which they are earmarked. As responsible citizens, have we not to see that those funds are properly spent only for that purpose for which they are allocated, economically, and see that there is no wasteful expenditure?

First of all, we have to see whether those funds are utilised for the purpose for which they are allocated and whether those funds are economically spent with all due care and with minimum wastage possible.

Secondly, we have to see that the amounts spent for a particular welfare purpose, whether reach the persons for whose benefit the welfare fund is allocated, and if so, to what extent?

I remember, when Mr. Rajiv Gandhi was the Prime Minister, he candidly admitted that not even 25% of the amount spent for any welfare purpose, reaches the persons for whose benefit such welfare activities are undertaken. Now, if we analyse the position today, the situation is worse than the situation when such candid remarks came from the Prime Minister. Possibly, today only 10% of the funds may be reaching the people who are supposed to be the beneficiaries of such welfare schemes. Now, why should we, the enlightened citizens tolerate the wastage or non application of the funds for which they are meant to be spent or question why the benefit of such spending does not go to the persons for whose benefit such spending is authorised? Technically, the government expenses are audited by the Comptroller Auditor General, but it is only the economic aspect of such spending that is undertaken. Have we not to take the social audit of such expenses? If not by the Government authorities, why not by members of the society themselves? Have we not to see that the amounts collected by way of taxes from our hard earned money are legitimately and properly spent for the purposes for which they are collected? Should they not be the subject matter of social audit by the public? Now, in accountancy profession there is proper auditing of a particular entity like company etc. Why not the same profession for a public cause not involve themselves in public audit including the social aspect of such audit of Government Accounts? If the Government spends properly and only to the extent it is necessary and for the purposes for which the funds are collected with complete sense of financial discipline, there will be a lot of saving and such amounts which are saved on wasteful expenditure would be available for other and better purposes of the general welfare of the people.

India has adopted a representative form of Government. The Government is clearly responsible and accountable to the public but it is equally the responsibility of the people to enforce such accountability on the Government’s expenditure.

In this respect, I personally feel the accountancy profession can play a very important role and particularly with the coming into force of Right of Information Act, the accountancy profession can collect all the possible data of the Government’s accounts, make a social audit and to see that the amount spent by the Government is as per law and also that the funds are spent without wastage for a legitimate and proper purpose for which they are collected. In this country unfortunately though technically the Government is accountable to the people, in practice there is total lack of accountability. If one watches the attitude of the Government authorities, they behave as if they are public masters rather than public servants. Apart from insisting on proper accountability for government activities in respect of financial affairs of the Government. We as citizens should also insist upon the accountability as regards the attainment of the social objectives, for such spending by the Government. This may be my mere loud thinking, but we can sit together and find out ways in which we can, by proper audit make the government accountable in respect of the expenditure of the Government, so that the scarce funds available with poor country like ours are utilised properly for attaining the welfare of the people of India.

The present issue, is on capital gain in its various facets. We thank all the learned contributors for their learned articles.