DAILY NEWS ANALYSIS

The Comptroller and Auditor General of India (CAG) is one of the most important institutions of the country to ensure public accountability of the executive.

What is Comptroller and Auditor General?

What are the challenges with CAG?

• Centrally sponsored schemes- It accounts for more than 1/10^th of budget but most of them have not been audited by the CAG beyond 2018.
• MGNREGA - In 2013, CAG found that the scheme have neither alleviated rural poverty nor created any durable assets but it has been left out of audit for over a decade.
• Political interference- Established convention is that CAG does not take part in public debates on contents of his reports, they are self-explanatory and compete with all evidences.
• But recently Union ministry has contradicted CAG’s observations on government accounts and gave point wise replies to each observation.
• Lack of transparency- There is no proper selection criteria with respect to CAG appointment.
• The involvement of executive in the CAG’s appointment is hugely problematic as he/she is supposed to audit the executive.
• Overburdened- It is very impractical for one individual to handle the audit mechanism of both the State and Central government as well as Public Service Units.
• Mismanagement- The office is allegedly holding up or delaying completed reports, alteration of approved audit plans, suspending filed audits midway which is done only in unusual situations like the pandemic.
• Poor administration- Transferring officers who have reportedly been involved in auditing sensitive government schemes impedes the public trust and confidence of the office.
• Decline in reports- The number of reports submitted by the CAG to Parliament has steeply declined over the years, thus questioning the political neutrality of the office.

CAG, Supreme Court, Election Commission and Union Public Service Commission were referred as the bulwarks of democratic system of government

What lies ahead?

• There should be a separate State auditor for each and every state and also specialized agencies which would maintain their accounts.
• As recommended by Murali Manohar Joshi Committee, a separate panel must be established to appoint the CAG.
• To obtain greater transparency, the suggestions of Shungulu Panel can be incorporated by advocating structural changes in CAG by making it a three-member body.

Israel has come up with plans to create an alternative to the Suez Canal.

What was the historical background of Suez Canal?

• Location- The Suez Canal is a man-made canal that connects the Mediterranean Sea to the Red Sea, providing a crucial shortcut for shipping between Europe and Asia.
• It cuts north-south across the Isthmus of Suez in Egypt.
• Year of construction - Construction of the canal began in 1859 and it took around 10 years to complete the project.
• Management- The canal is owned and maintained by the Suez Canal Authority (SCA), which is under the government of Egypt.

• Convention of Constantinople- Signed in 1888 by the maritime powers, it stated that the canal should be open to ships of all nations in times of both peace and war.
• Acts of hostility in the waters of the canal and the construction of fortifications on its banks were forbidden by the convention.
• The British and French owned most of the shares in the canal company and used their influence to protect their interests.
• Suez Crisis - In 1956, Egypt took over the Suez Canal from the British and French shareholders to fund a dam project on the Nile River.
• This nationalisation triggered a military attack by UK, France and Israel on Egypt, marking the 1^st deployment of the UN Peacekeeping Forces anywhere in the world.
• They were stationed in Sinai to maintain peace between Egypt and Israel after the withdrawal of the invading forces.
• Egypt-Israel conflict- In 1967, Egypt expelled UN peacekeepers from Sinai and fought with Israel.
• Israel captured Sinai and Egypt blocked the Suez Canal for 8 years.
• In 1975, Egypt and Israel signed an agreement to end the hostilities and reopen the canal.
• Arab-Israeli War - The canal was also a key battleground in the 1973 Arab-Israeli War, where Egypt and Syria attacked Israel.

Established in 2015, Suez Canal Economic Zone is a special economic zone located in Egypt to promote economic growth and to attract foreign investment to the country.

What is the significance of Suez Canal?

• Global trade- The canal is a vital link between the West and East, carrying 10% of the global trade every year.
  • An estimated 12% of world maritime trade passes through the Suez Canal.
• Time efficient- The canal ensured that ships travelling between Europe and Asia would not have to travel all the way around the continent of Africa.
  • The canal cut the distance between London and Mumbai by a more than 41%.
• Economy lifeline- As per World Bank, the canal accounts for nearly 2% of Egypt’s GDP.
• Traffic management- The canal handles an average of 50 ships per day, with a total value of 9.5 billion dollars.

What are the issues with Suez Canal?

• Shipping bottleneck- Despite being widened and deepened over the years, the canal remains perennially congested, with long queues at either end.
• Suez Canal blockage- In 2021, the cargo ship “Ever Given” got stuck in the canal thereby affecting the global supply chain and oil prices.
  • It was estimated that the resulting “traffic jam” held up an estimated 9.6 billion dollars of goods every day.
• Monopoly- Egypt’s control over the waterway has been a source of conflict for almost 70 years now.

What was the alternative proposed to Suez Canal?