Unfortunately, even as PSUs lost on the swings (because private sector players were better placed to benefit from the reform process and globalisation), they were not allowed to make up on the roundabouts. In many ways, they continued to function as in the past, with the ministry, the mantri and the CAG breathing down their necks. The concept of navaratnas was an attempt to mitigate the formerit is a different matter that it has remained largely on paper. The decision to scrap supplementary audits by the CAG is an attempt to tackle the latter.
Audits, whether statutory or supplementary, impose a cost in terms of time, money and effort. However, to the extent they do perform a valuable function by highlighting any irregularities/potential trouble spots, these are also an integral part of any business. Indeed, no one would argue that audits be done away with. It is a moot point, however, whether any purpose is served by having a multiplicity of audits, as is the practice in PSUs, where the statutory audit by chartered accountants appointed by the CAG is followed by a supplementary audit by the CAG itself. That is not all. The CAG also does a proprietary audit and a performance review. The senior management in PSUs spends valuable time answering endless queries, time that could be better spent attending to operational issues. By scrapping the CAG audit, hopefully that is what they will do.