Friday, November 30, 2012

Big financial scams in India and CAG

In India 2G spectrum scam, Coal mining scam has taken big attention of media. Where thousands of

crore involved.These scams highlighted after CAG (The Comptoller And Auditorial General)

produced its report.CAG in India is an authority, established by the Constitution of India.CAG audits

all receipts and expenditure of the Government of India and the state governments, including bodies

and authorities substantially financed by the government.The CAG is also the external auditor of

government-owned companies.

2G Spectrum scam

A CAG report estimated loss of Rs.30,983,55 crore. In a chargesheet filed on April 2011 by the

CBI, the agency shown the loss Rs.176,540 crore. Supreme Court of India cancilled all the 122

licenses issued in 2008 against a Pil during period of A.Raja, minister for communications & IT of

that time,the main accused.The court further said that A. Raja "wanted to favour some companies.

Revenue loss calculation was further established on August 2012 when according to the directions of

Supreme Court,Govt of India revised the reserve price for 2G spectrum to Rs.13,788 crore.

Coal Mine Scam

In 2012 The CAG report criticised the Government by saying it had the authority to allocate coal

blocks by a process of bidding, not by chose.As a result,both public sector enterprises and private

firms paid less than they might have otherwise. In its draft report CAG estimated that the "windfall

gain" to the allocatees was Rs.1,067,303 crore.The CAG Final Report tabled in Parliament shown

figure Rs.185,591 crore While the initial CAG report suggested that coal blocks could have been

resulting in more revenue to the government, at no point did it suggest that corruption was involved

in the allotment of coal. In 2012, however, the question of corruption came to discussion. In reaction

 to a complaint by the opposition, the Central Vigilance Commission asked the CBI to investigate the

matter. The CBI named a dozen Indian firms in a First Information Report FIR. These FIRs accuse

them of overstating their net worth.

If we analyze most scams we find that Persons in authority with colloboration of business persons

either relative or known, perform such scams.At one side we see government loss on other side

 Business entity as described above produce false benifits of their companies. And Investor also face

 big losses by these companies if these are listed in stock exchange.

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