When former Director General of Audit at the Comptroller and Auditor General (CAG) of India, P. Sesh Kumar, speaks, he does so with decades of experience behind him - and with the authority of someone who's seen India's auditing system from the inside. In an exclusive conversation with Asianet Newsable English's Heena Sharma, he spoke about digitisation in the CAG, challenges during the 'Coalgate' audit under the UPA government, and the path ahead for accountability and reform.

CAG Embraces Digital Tools - But Paper Trails Still Linger

With India's governance rapidly moving into the digital age, Kumar says the CAG too is adapting.

“There is a strategic framework, AI strategy framework, and they're using data analysis in a big way,” he said, referring to the CAG's recent modernization drive.

The project, aptly titled 'CAG Connect', aims to reduce dependence on paper and move toward big data analytics and remote verification.

“The whole idea is not to depend entirely on the paper trail, but to examine large databases, analyze them through auditing tools, and, if necessary, verify outcomes using satellite imagery and hybrid methodologies,” Kumar explained.

However, he added that the transition is still in its early stages and not yet scaled up to a continuous level.

“Shift to Accrual Accounting Is Urgent”

One of Kumar's key advocacy points is India's need to move away from cash-based accounting.

“Accrual accounting tells us our future liabilities, our assets, and income not yet received before a particular date,” he explained.“We don't account for depreciation or have proper valuation of assets... the sooner we shift to the accrual-based system, the better for proper appreciation of the financial liabilities of the government.”

He stressed that while CAG has been working for over 15 years to set accounting standards, implementation across states has been slow.

Audit Is“An Occupational Hazard”

Kumar's candour shines when he talks about the practical hurdles audit teams face.

“Audit is not a welcome activity as far as the auditee is concerned. Very few would like to welcome an external independent audit like CAG's,” he said.

He described a pattern of delays, non-cooperation, and withheld records.

“Records come reluctantly, often very late... important records may not come in time, and very little time is given to the audit team,” he noted, adding that this“has historically been there and will continue unless both sides improve cooperation.”

'Coalgate' and a Stinking Room

In his latest book Unfolded, Kumar recalls how auditors probing the coal allocation scandal during the UPA years were placed“in a stinking room near a toilet.” He contextualised the incident, saying it occurred when tensions between the government and auditors were high after the explosive 2G and Commonwealth Games reports.

“Even joint secretaries used to fight for better rooms, probably with toilets attached, which were very few... unfortunately for the audit team, it happened to be adjacent to a stinking toilet,” he recalled.

The episode, he said, symbolised the hostile environment auditors sometimes endure.

On Manmohan Singh's Defence in Parliament

Kumar also addressed former PM Manmohan Singh's remarks defending the delay in auctioning coal blocks.

“The policy file produced to the audit team clearly said there was a chance for the government to introduce auctions,” he revealed.“Law ministry favoured it could be done through ordinance, but in their wisdom, they decided to go the statutory route. They said it would take time as state governments had to be consulted.”

Eventually, he said, the 2015 coal block auctions vindicated the CAG's findings, showing potential revenue of ₹1.95 lakh crore - matching the earlier audit estimate.

“India Is Still Behind in Using AI for Audits”

Kumar admitted India lags several countries in leveraging AI for auditing.

“Even small countries like Estonia are way ahead in actual execution of data analytics and AI. The USA and UK have progressed much beyond our efforts,” he said.“India is quite way behind - maybe two to five years - but at least now they've realised it's time to escalate from pilot studies to real delivery.”

Delayed Reports, Missed Opportunities

According to Kumar, post-facto audits are one of the system's biggest weaknesses.

“Some reports come five years after the events have happened - they have no utility for mid-course corrections. They are only fault-finding,” he said, adding that the CAG must also highlight good practices noticed during audits.

He believes that friction between the executive and auditors will persist unless both sides work on timeliness and transparency.

“CAG Shouldn't Abandon All-India Performance Audits”

Kumar laments that CAG's focus has narrowed over the years.

“We don't have All India Performance Audits like we used to a decade ago,” he said.“Thousands of crores are spent on welfare schemes every year, but outcomes aren't analyzed properly. CAG must examine assumptions behind policies and deficiencies in monitoring.”

He called for a revival of national-level audits on social welfare, rather than fragmented, state-specific outcome audits.

Blockchain, Self-Accountability, and the Road Ahead

Kumar also advocates integrating blockchain into auditing for transparency - though he warns against conflating it with cryptocurrency.

“Blockchain isolated from cryptocurrency is what I am trying to attempt at... even advanced countries are not using it in a large way, but India should plan ahead,” he said.

Addressing the issue of internal accountability, he acknowledged a recent controversy involving CAG officials abroad.

“It was an aberration... the delinquent official was called back and suspended,” he confirmed, calling it“one of the saddest incidents” in the institution's history.

What's Next for P. Sesh Kumar?

Despite retiring, Kumar's intellectual curiosity hasn't dimmed.

“I have two more books in the pipeline - one on what ails India's medical education system, and another on the MSME and startup ecosystem,” he said.

For a man who's spent a lifetime auditing the nation's books, P. Sesh Kumar is now auditing its conscience - urging institutions to modernise, be transparent, and stay accountable to the people they serve.

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