Defence Secretary Shashi Kant Sharma was on Tuesday appointed Comptroller and Auditor General (CAG) of India. He takes over from Vinod Rai, who retires on Wednesday.

Sharma, a 1976 batch Bihar cadre officer and an old hand in the Defence Ministry, will assume charge on May 23. R K Mathur, Secretary, Defence Production, is likely to become the new defence secretary.

Even before Sharma could take over, there were whispers in the corridors of power whether he would be able to maintain the standards set by Rai, who gave countless sleepless nights to the United Progressive Alliance  government by his audit reports on massive financial irregularities seen during Commonwealth Games, allocation of 2G spectrum for telecommunication operators and allotment of coal blocks.

Launching an attack on Sharma, Aam Aadmi Party leader and Supreme Court advocate Prashant Bhushan questioned the legality of the appointment because of the “conflict of interests” as Sharma had served the Defence Ministry for over 10 years in key posts and “a major part of CAG’s job is to audit defence purchases.”

At a press conference, Bhushan said Sharma’s appointment was illegal and liable to be struck down for the conflict of interest entailed in his assignment. “Sharma worked in the Defence Ministry for 10 years when all important defence acquisitions were made. Such a long period for a bureaucrat in the same ministry is unusual. The UPA even granted him an extension after retirement. This indicates his proximity to UPA bosses.”

 Sharma held the posts of joint secretary, additional secretary, director-general (acquisition) and defence secretary. During his tenure, defence budget swelled from around Rs 25,000 crore to more than Rs 2 lakh crore as India emerged as one of the most lucrative markets for military business.

Bhushan said the government decided to appoint “pliable” people to such posts which function as constitutional watchdogs like the Election Commission, Central Vigilance Commission and the Central Information Commission.

Pradip Kumar, Sharma's predecessor in the Defence Ministry, has been appointed the CVC by the UPA government.

Bhushan alleged the CAG “is appointed” not in a transparent and arbitrary manner as “there is no formal” system—no selection committee and no eligibility criteria. The appointment of a person as the CAG through such an arbitrary and non-transparent process compromises the principle of “institutional integrity which the Supreme Court had laid down while quashing the appointment of the previous CVC who was appointed in similar circumstances.”