cag: CAG to assess impact of old pension scheme on finances

India’s statutory auditor, the Comptroller & Auditor General of India, is taking a deep dive to ascertain the impact of the old pension scheme on finances after some state governments decided to revert to that.

The CAG has also started work on a comprehensive account of natural resources in the country that will aid policymakers in planning their sustainable utilisation.

The Centre had instituted a contributory National Pension System (NPS) for those joining service from January 1, 2004, ending the costly defined benefit regime. States had over a period joined the NPS.

“We are doing a modelling exercise to see how it will impact government finances,” Comptroller and Auditor General GC Murmu told ET.

A division within the CAG is looking at various aspects of the switch back including entitlement and expenses to see the long-term and short-term impacts.

Economists have warned that switching back to the old pension scheme from the NPS could have disastrous consequences for state finances.

Accounting of resources

As part of the in-depth examination of natural resources in 28 states, accounts have been compiled and under the process of validation. The CAG will be roping in technical experts for this first-ever exercise that would cover minerals and non-conventional resources as well.

Returning to normalcy

Post-pandemic, the audit process has begun to normalise and could return to the pre-pandemic stage soon. “Prior to Covid, we were doing on average 42-45 audits, which fell to 18-20 during the pandemic … We are now doing 33 on average for the union government,” said another official from the CAG. “For state governments, it has almost reached an average of 131 which shows that now we are almost at the same level as pre-pandemic.”

The official said the CAG would soon be completing a comprehensive audit of states of health service delivery including health management, existing infrastructure at each level, procurement, and availability of personnel.

It will include a qualitative audit of the services delivered including turnaround time taken with each patient, implementation of the National Rural Health Mission and Ayushman Bharat.

The CAG is also looking at audits of local bodies receiving substantial government grants.

“We have created a separate vertical for carrying out audits for local bodies … These need to be strengthened as they take empowerment at the grass-root level,” the official said.

Strengthening CAG

In keeping with the times, the CAG is trying to use technology in the audit process and all field offices have been integrated. The official said with a lot of data including on direct benefit transfer and other schemes now available online, the CAG could directly audit them with IT tools or using artificial intelligence.

“We will also be looking at IT proficiency besides accounting as a skill set going forward as part of the recruitment … We would be setting up a committee to look into recruitment rules soon,” Murmu said.

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