Crony capitalism killing transparency, competition: CAG

Comptroller and Auditor General (CAG) Sashi Kant Sharma today made a strong case for effective dealing with the menace of crony capitalism, saying that it adversely impacts competition and transparency.

He also underlined the need to curbing misappropriation of public funds which are needed for alleviating poverty and improving country's infrastructure. Sharma was speaking at an event at Ankola in Karnataka.

"...misappropriation of public resources and the resultant phenomenon which is called crony capitalism where we find that competition and transparency are sacrificed, and favouritism and irregularities in transactions take place. So that is an area where we have to admit that we have to do something," he said.

Crony capitalism generally refers to a business environment where success depends upon close relationships between corporates and government functionaries.

He further said that although the country has made good progress in certain fields, there are areas which need attention of the government, according to an audio release.

Referring to problems like high unemployment, poor infrastructure and hygiene, health and medical facilities, Sharma said these the areas which needed investment.

Reserve Bank Governor Raghuram Rajan had also expressed concern about "crony capitalism" pointing out that it kills transparency and competition and hence is harmful to free enterprise, opportunity and economic growth.

"By killing transparency and competition, crony capitalism is harmful to free enterprise, opportunity, and economic growth," Rajan had said.

Javadekar said "correct" pictures on the scams are now emerging after the disclosures made by the former CAG.

The minister said the former Prime Minister had blamed Congress's coalition partners for the 2G and Air India scams as the ministries were being held by their leaders, but questioned "what he (Singh) would say on the Coal block allocation scam which came out when he was the Coal Minister between 2006 and 2009".

"About coal, I, myself had complained after which there was a CBI investigation and the reasons why they (coal blocks) were given to someone were not explained and why they were not given to others were also not explained," Javadekar said.

Former CAG Vinod Rai, who is writing a book on his days as head of Comptroller and Auditor General of India, has in an interview criticised Singh. Rai said he felt he felt Singh was part of the decisions to allocate 2G telecom spectrum on first-cum-first serve basis and coal blocks without auction.

"...in 2G and coal there is no way he (Singh) can shirk responsibility. In 2G all the letters written by (then telecom Minister) A Raja were to him and he was replying to those letters. I got no reply to any letter I wrote to him.

"On one occasion when I called on him, the PM said I hope you don't expect a reply from me, whereas he was replying to Raja twice a day. So how can he be not held responsible for the onus of that decision?" Rai had asked.