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Cover Story

The Rai-Sing

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UNUSUAL BOOKKEEPER: Rai has an informal style of working and has handpicked his team.

The UPA thinks the CAG should stick to faceless auditing. Vinod Rai thinks it needs a facelift. A face-off was inevitable.

If you had met Vinod Rai five years ago, you might have dismissed him as just another bureaucrat, albeit a competent one. After all, there were few occasions when he showed his fangs. A rare moment was when he got the government to take charge of the Infrastructure Development Finance Company. But that was seen as a fight between finance ministry babus and financial professionals, several of whom had spent time in foreign institutions. Rai, then a joint secretary in the finance ministry handling institutional finance, took charge of the board before restructuring the government holding.

On most occasions, he would tend to go with the political view of the times - be it restructuring of loans around the time Narendra Modi was trying to win the 2002 Gujarat elections or the farm loan waiver scheme on the eve of the last general elections.

"Most often, he would say 'I have informed the finance minister. He will decide'. From then to now, it's a big change, " said a retired official who was Rai's senior in the finance ministry.

The Kerala cadre IAS officer, who handled banks, financial institutions and insurance companies during his six-year stint in what later came to be known as the department of financial services, with Rai as its first secretary, was hugely popular with his subordinates and public sector chiefs. That probably helped him act as the ministry's key troubleshooter in times such as the eight-day SBI strike or while setting up a new regulatory agency for the pension sector at a time when the Left was supporting the UPA and was strongly opposed to the pension reforms.

In fact, his leadership skills are something that former colleagues from Kerala vouch for. "He knows people's strengths and can make best use of them, " says a senior officer who worked closely with Rai when he was the state finance secretary.
At the Centre too, many expected Rai to be finance secretary and then move to the RBI as governor. But D Subbarao first went to North Block, by virtue of his seniority, and then moved to Mumbai.

Several in the ruling UPA, who are ruing the government's decision to appoint him the Comptroller and Auditor General, would have been more than happy to see him on Mint Road. After all, he could have only increased interest rates. By staying back in Delhi, Rai has increased the political temperature with a series of reports - from the 2G spectrum scam to the Commonwealth Games mess. And, more dirt is expected to come out, especially on Air India and the alleged favours shown to private companies in the development of oil and gas acreages.
Rai's colleagues in the CAG office say that the 63-year-old bureaucrat came with his own working style. He is informal, has again handpicked his team and, more importantly, is letting hitherto faceless auditors hog the limelight.
From glossy audit reports - with graphs and annexures - to PowerPoint presentations and a high-profile list of members of what was once a virtually unknown advisory committee, Rai has changed the way the CAG works.

He attends industry seminars, interacts with civil society on issues such as water management and makes an appearance for photographers when audit reports are tabled in Parliament.

In between, he holds off-sites in Kumaon to decide what the government's auditor should focus on next. At these meetings, where less than a dozen top officials are invited, targets are fixed and subjects that would interest everyone are shortlisted. Rai does not mind picking up the phone to call even a middlelevel officer to get an update on the audit work. He has sought more powers to ask for information and wants to extend the ambit of audit to public-private partnership projects.

In the middle of his term, Rai is also generating controversy with his highprofile reports. For instance, government officials are questioning the rationale behind the CAG's comments on the appointment of Suresh Kalmadi as the head of the CWG organising committee. "That's not his role. He is supposed to look at government's accounts and see whether everything is in order or not, " said a former Indian Audit and Accounts Service (IAAS) officer.

Even Prime Minister Manmohan Singh had indicated that the auditor might be overstepping its mandate by commenting on policy matters. But that was seen as a comment from the head of a government that is facing a series of corruption related charges, some of which were first flagged by the CAG.

Even the high profile report releases have become a talking point among former and serving officers. "The CAG is just like a company's auditor. Most people do not even know who the auditor is since it is supposed to report to the shareholders through the management. Whatever observations have to be made are made in accounts. That's how we functioned, " said the former IAAS officer. Clearly, this is not how Rai sees his or the CAG's role.

Rai refused to speak to TOI-Crest. But there is already speculation on what he will do next. Will he follow T N Chaturvedi, the CAG at the time of the Bofors controversy, into a Raj Bhawan or contest elections as former Chief Election Commission T N Seshan did unsuccessfully?

For the moment, he is making life difficult for the government, as much by the manner in which the CAG's reports are publicised as by their often explosive contents.

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