VVIP Chopper deal: CAG draft report ready, ball in govt court

The government could face CAG fire on Augusta Westland helicopter deal much earlier than one would have otherwise expected. While the CBI and CVC are still waiting to get all the relevant documents from the Defence Ministry, the CAG has already prepared its draft report on the controversial Rs 3,546 crore 12 VVIP chopper deal and has sent it to the ministry for comments.

The CAG has sent its observations over the deal in the draft report to the ministry last week for comments. As per the norms the ministry would be expected to file its comments on CAG draft report observations within a period of 45 days. There is, however, no written regulation under which could make it mandatory for the ministry to adhere to this time frame. If it goes as per the schedule, the final report should be ready to for presenting in Parliament during the second half of the budget session, which would begin from April 22 and continue till 10 May. The incumbent CAG Vinod Rai is due to retire in May this year from his post.



While the contents of the draft report on Augusta-Westland helicopter deal is a tightly kept secret (given the accusation of leakage from the political leadership in the UPA government and Congress, the officials have turned cautious than ever), one could expect this report to be as explosive as those on 2G and Coalgate. That could be the most damaging for the government, which is already under fire after the allegations of existence of middlemen and kickbacks was substantiated by arrest of Giuseppe Orsi, CEO of Finmeccanica in Italy.

Sources said the CAG took up this issue few months ago when the reports of existence of middlemen and kickbacks started appearing in the media. In any case, the CAG is mandated to look into all big contracts and as such all defence contracts are scrutinised by the CAG.It would be interesting to see how soon the government sends it comments on the draft observations to CAG.

In any case, that would happen in the second half of the budget session of Parliament. But the first half of the budget session, beginning from 21 February to 22 March 22, is not going to be easy for the government. In what could be most politically sensitive, the CAG report on farmers loan waiver done in UPA-I is final stages and is expected to be signed by the CAG and sent to the government for tabling in Parliament, anytime next week. A report on UPA flagship programme MANREGA will also be tabled in the first half of the budget session.

The farmer loan waiver, which turned out to be a clincher for the UPA I and is said to have swelled farmers support for the ruling Congress in 2009 parliamentary elections, did not actually benefit the intended beneficiary. The UPA I's Rs 52,000 crore farm loan waiver scheme is in fact turning out to be leaking at various levels. Out of one lakh farm loan waiver accounts audited in 700 bank branches across the country involving disbursement of Rs 500 crore about 30 percent of the waiver amount was allegedly found to have been siphoned off by a nexus of bank managers and microfinance institutions (MFIs).

The CAG inquiry into nearly one lakh accounts could reveal that more than Rs 150 crore was paid to half a dozen MFIs. These MFIs are said to have provided no relevant records to the banks if the benefits have actually gone to deserving farmers. The auditor has also raised objection to the payouts made to MFIs as it was against the mandate of the scheme, which was meant for small and marginal farmers. The disbursement was to be made directly by the banks to eligible farmers.

While unlike the 2G and Coalgate there are no big names involved in the loan waiver report, it could be politically damaging for the Congress, since this is related to the social support base of the party that too when it is preparing for the next general elections. The opposition parties are already demanding a CBI inquiry into the Rs 52,000 crore loan waiver scheme.

The CAG has already confirmed that yesterday that the report on AgustaWestland helicopter was in progress. If the government would be under attack from the opposition on the deal in first half of the budget session, the CAG report could make it explode in the second half. At least that’s the reputation the CAG has built.

Updated Date: Feb 18, 2013 10:51 AM

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