INDICATORS & PUBLIC ACCOUNTABILITY IN INDIA
AUTHOR : VIJAYENDRA N. KAUL, C&AG OF INDIA
Public Accountability & Audit
1.
In India public accountability entails accountability not only of the executive to the elected
legislative bodies but also of the subordinate public agencies to the executive. In particular, financial
accountability is realized through budgetary control including proposals for taxation and public debt and
demands for grants being voted in the legislatures and reporting of expenditure in the form of accounts. .
Accountability & Performance auditing
2.
There has been a progressive shift of stakeholder concerns beyond budgetary control and
regularity of public expenditure to the outcome and impact of State’s interventions in the development
process. In deference to stakeholder interests, SAIs have also started devoting greater resources to
performance auditing.
Apart from the economy and efficiency in use of resources in government
programmes and schemes, performance audits also evaluate effectiveness of performance in relation to
the achievement of the objectives of the audited entity and audit of the actual impact of activities
compared with the intended impact.
Performance auditing & indicators
3.
Critical to evaluation of the effectiveness of government programmes and activities is the
adoption of an appropriate criteria for evaluating performance. Presence of a widely accepted system of
indicators in economic, social and environmental areas would provide a uniform set of criteria not merely
for performance audits by an SAI but also evaluation by other agencies (external and internal).
Unfortunately there is no comprehensive system of performance indicators available in many countries.
Divergent practices continue to be followed by independent evaluators, national governments and
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multilateral agencies.
The inconsistent quality of statistical information within & across countries
currently leaves scope for divergence of views on performance evaluation. This leads to widely divergent
conclusions regarding the extent of success of government interventions. Therefore, there is need for
development and acceptance of a selected set of indicators to inform civil society and support wider
communication with the public.
4.
Such a set of indicators would facilitate the understanding of the mutual inter-dependence of
various policies/programmes; assessing the position and progress of the economy over time, across the
countries and across the regions within a country; providing crucial guidance for decision making in
identifying and transition towards sustainability, and providing information to general public in forms that
non-specialist’s can relate to and thus strengthen the accountability mechanism of governance.
Need for indicators : SAI India’s case
5.
The Comptroller & Auditor General of India is mandated to audit all the expenditure and receipts
of both the federal and provincial governments, all commercial enterprises where government have a
majority equity stake and all other organizations which are substantially financed by grants from the
government. The audit is not restricted to regularity and compliance and has progressively been oriented
towards evaluating performance of the various programmes and schemes undertaken or funded by the
Government.
6.
In order to prioritise its activities and audit efforts, SAI India has formulated a Strategic plan
2003-08 which is premised on evaluation of the various programmatic interventions of Government so as
to promote accountability and encourage effective utilisation of resources. The five themes selected for
this Plan reflect the priorities of the Tenth Five Year Plan adopted by the Government of India.
The
theme of human development incorporates social sector programmes of poverty alleviation, health
services, population stabilisation, literacy and education, nutrition, food security, and, improvement of
disadvantaged and vulnerable groups. The theme of economic liberalization includes fiscal management,
tax reform, management of subsides and privatization.
The theme of infrastructure modernization
includes power sector, ports, roads, railways, communications and hydrocarbons.
The theme of
technology upgradation covers information technology and biotechnology. The theme of sustainable
development includes environmental legislation, multilateral environmental agreements, air & water
quality, waste management etc.
7.
The primary objective of the audit efforts of SAI India will be on assessing the efficiency,
effectiveness and economy of the various schemes and programmes funded by the government and make
recommendations for improving performance. Presence of a set of key indicators in each of these areas
would go a long way in making the performance audit results more reliable and acceptable.
Indicators & result based budgeting
8.
Indicators play a more critical role in organizations that have moved to result based budgeting
e.g. UN agencies The key identifying feature of results-based budgeting is that the emphasis is on the
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outputs to be produced (reports, studies, conferences, etc.) and consequent outcomes, as opposed to input
budgeting where the defining feature is an emphasis on the inputs (staff, materials, equipment, etc.). The
orientation towards either outputs or inputs is important at all stages of the budget process (programming,
budgeting, implementation, monitoring and evaluation). However, the most important determining factor
here is the initial budget proposal stage as this sets the output pattern and framework for all subsequent
stages.
9.
Almost all the UN agencies have moved to result based budgeting. A similar trend is also evident
among national governments. In such contexts, clarity and consensus on indicators is extremely
necessary. Furthermore if indicators become integral to stakeholder reporting, independent and external
verification (equivalent to assurance on financial statements) should become essential. A comprehensive
system of indicators would infact supplement accounting standards and disclosure norms in such an
environment.
Nature of Indicators being used in India
10.
In its aspiration to quicken the pace of development and to raise the economic well being of its
people the Government of India has been following a path of centralized economic planning. This
entailed planned commitment of resources to realize objectives on which there was political consensus.
Both the establishment of goals and evaluation of the success of the plans needed indicators and reliable
statistical information on those indicators. Hence, ad hoc indicators sets were developed early in the
country and used for monitoring government expenditure. However, no system for comprehensive
monitoring of the economy through reliable indicator was in place.
11.
Indicators and statistical information was generated at two levels. At the first level, information
on the performance of the Government is generated and disseminated by economic and social ministries
and departments of the national and provincial governments by way of either an administrative byproduct or specifically designed periodic or ad-hoc surveys. In addition, there are centralized agencies
such as the Central Statistical Organization (CSO) and the Programme Evaluation Organisation which
compile, collate and analyze information about a host of parameters of national importance both as policy
inputs to planning or development interventions or as the outcome of past programmes.
The issues of
symmetry of information by this centrally located evaluation agency and the requirements of better
cooperation with the implementing department are addressed through Coordination Committees, set up
for each evaluation exercise, which have representatives from line ministries/departments and other stake
holders and subject matter specialists as their members.
12.
Another source of statistical information on national indicators has been the decadal population
census which have been in vogue in India since 1881. It has emerged as one of the most comprehensive
sources of demographic information down to the village level. Besides the head count of population, the
census also collects and provides information on status of houses as residential and non-residential,
information on occupation by age, sex, marital status, social status, educational level attained, economic
activity, fertility trends and migration. Census also validates the data generated by Central Registration
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System (CRS) which makes registration of births and deaths mandatory. Population is used as a common
normalizing factor to make parameters like revenue, expenditure, income, infrastructural availability, etc.,
scale neutral.
Social indicators
13.
Comprehensive indicators have been designed in health and education sectors. Annual Health
Information Index by the Department of Health and Family Welfare provides information on vital
statistics, infant mortality rates, life tables, prevalence of communicable diseases, coverage of population
under family welfare programmes, number of health care units at primary, referral and specialty and
super-specialty level, medical and paramedical persons, etc. National Samples Survey Organisation
(NSSO) of CSO in their consumption expenditure surveys of household also provides information on
expenditure of household of health related aspects. Ministry of Human Resource Development provides
information on teaching institutions, teachers, examination results, enrollment, educational inputs and
physical facilities. Information is also provided by NSSO on household expenditure on education and
literacy levels. However, there has yet been no move to adopt International Standard Classification of
Educational Statistics proposed by UNESCO and as such international comparability of many education
related indicators is still absent.
Economic Indicators
14.
NSSO through their quinquinial surveys undertaken every five years since 1972-73 provides most
comprehensive set of data on employment. It provides estimates of number of employed according to the
activity status and their estimates of numbers of employed according to the activity status and their social,
demographic and economic characteristics. Director General Employment and Training also provide
information on employment in organized sector, but for informal and unorganized sector, NSSO surveys
are the ultimate source.
15.
NSSO generates household consumption expenditure data akin to the Family Living Surveys in
most other Countries through specific surveys since 1950-51. These are extensively used in studies on
levels of living, disparities in levels of consumption, cross section and time series analysis of consumer
behavior, incidence of poverty, etc. In recent years, the survey data have become extremely important for
the measurement of absolute poverty and head count poverty ratios. Department of Rural Development
had initiated Below Poverty Line surveys for their poverty alleviation programmes to assess their
numbers. The consumption surveys for selected class of population have also been in vogue. The Labour
Bureau in the Ministry of Labour has been conducting Family Living Surveys since 1958-59 for industrial
workers to draw their weighting diagram for Consumer Price Index (CPI-IL), which is also used as an
inflation index for organized sector wage indexation.
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Environmental Indicators
16.
In addition to the two broad groups of social and economic indicators, some institutional and
environmental indicators are generated. Environmental indicators relate to pollution levels, pollution
control measures, air and water quality, forest cover, etc.
Human Development Report 2001
17.
A major initiative was undertaken by the Planning Commission of India in 2001 to put together
seventy indicators and three composite indices to evaluate the development process. The Report focused
on three critical dimensions of well being, namely, ability to live a long and healthy life; the ability to
read, write and acquire knowledge; and the ability to enjoy a decent standard of living and have a socially
meaningful life. An extensive state level data base was prepared covering around seventy indicators. The
entire data set has been compiled for at least two points of time; early eighties and early nineties.
18.
An attempt was made to capture the process of development from two perspectives-
conglomerative perspective, capturing advances made by the society as a whole and the deprivational
perspective, assessing status of the deprived. Statistics was therefore also compiled for the elderly,
working children, disabled and violence and crime against women. Similarly separate information was
captured for women, people residing in rural areas and those belonging to so called lower castes. For most
indicators gender and Rural-Urban gaps were estimated.
19.
The Report also attempted three composite indices. A Human Development Index which
incorporated inflation and inequality adjusted per capita consumption expenditure, a Human Poverty
Index encompassing longevity deprivation captured by the indicator persons not expected to survive
beyond age 40 years; Composite indicator on educational deprivation and Composite indicator on
economic deprivation and a Gender Equality Indices using the same methodology as HDI.
20.
The data has been presented in a unique manner, through ‘development radars’, which gives a
snapshot view of the structure, the growth and the gaps vis-à-vis desired normative levels, in respect of
eight different indicators covering attainments on education, health, economic well being and access to
amenities. It not only helps in simultaneously assessing attainments in different aspects of quality of life,
but is equally useful in identifying the areas of gaps for facilitating an informed policy focus at the State
level. The development radars overcome the criticism often directed at the use of subjective weighing
techniques to combine diverse social indicators into composite indices of human development.
21.
Despite its contextual significance in aptly capturing the concerns of our people, the Human
Development Report and its indices were not able to address the growing importance of environmental
issues. They were also not able to integrate several aspects of sustainability. A mapping of the indicators
used in the HDR with those of OECD and CSD is placed at Annexures I and II respectively.
Developing a preliminary Sustainable Development Indicators framework for
India
22.
In another initiative, the task of formulating a comprehensive set of Sustainable Development
Indicators has been taken up by the Government of India. This has been a follow up to the decisions taken
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at the Rio and Johannesburg summits. The formulation of a comprehensive set of indicators takes on a
great complexity in the Indian context. The first major problem is definition of a set of indicators which
are relevant throughout the country, especially in view of different socio-economic and environmental
concerns in the urban, rural and other geographical regions. The second issue is addressing data
requirements for aggregation of local indicators at the national level.
23.
Work has already been done by several agencies across the World in formulating indicators of
sustainable development. These would provide some guidance but the final framework will need to
address the specific circumstances of the Indian reality. The alternative models are presented in the
succeeding table.
Initiative
World
Development
Indicators
State of the Environment
(SoE) reports
World Resources
Framework
Six sections: Worldview, People, Environment,
Economy, States and Markets, and Global links
United
Nations SoE framework based on PSR approach
Environmental Program
World
Resources Assessment and analysis of the state of various
Institute
ecosystems
Human
Development United
Nations Critical analysis of a specific theme each year to
Report (HDR)
Development Program
assess the state of human development
World Health Report
World
Health Presentation and expert analysis of indicators of
Organization (WHO)
health systems and status
International
OECD in partnership Indicators that gauge progress towards
Development
goals- with the UN, World development goals selected from a series of UN
indicators of progress
Bank and IMF
Conferences held during the decade of 90s.
Indicators of sustainable Commission
on 134 indicators organized in Driving force-Statedevelopment
Sustainable
Response (DSR) framework-replaced by 4
Development (CSD), dimensions (economic, social, environmental,
United Nations
institutional)
24.
Organisation
World Bank
While most attempts capture indicators relating to specific themes, the indicator programme
undertaken by the UN CSD has a larger mandate of developing a framework for ‘indicators of sustainable
development’. This programme was initiated in 1995 in response to Agenda 21 which called for
harmonized efforts towards developing indicators of sustainable development that could provide a basis
for decision making at all levels. The main objective of the CSD Work Programme was to make SDI
(sustainable development indicators) accessible to decision- makers at the national level, by defining
them, elucidating their methodologies, testing them and providing training and other capacity building
activities.
Audit of Indicators
25.
The CAG of India has been making use of indicators widely in international audit assignment
particularly in cases where resulted based budgeting has been adopted. However, use of indicators for
audit in the domestic context has not been on a systematic basis.
This is primarily because a
comprehensive set of key indicators have not been determined for purposes of reporting, planning,
clarifying policy objectives and for budgeting and assessing performance. As stated earlier there is a
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proposal to adopt a comprehensive set of sustainable development indicators. We envisage a distinct role
for an SAI once this is done.
26.
Apart from the usefulness of indicators to SAIs in discharge of their performance audits,
indicators could themselves be objects of audit scrutiny of SAIs. For instance, SAIs might look to see
whether indicators:
a) Have policy relevance, which means that they must be easy to interpret; show trends over time;
respond to changes in driving forces; and have threshold or reference values against which
progress can be measured.
b) Are analytically sound, for example based on a clear understanding of the goal of sustainable
development;
c) Are measurable, that is, no matter how attractive the theoretical construct, if an indicator cannot
be measured at reasonable cost, it is not useful.
d) Are able to aggregate information. The list of potential sustainability indicators is endless but for
practical reasons, indicators that aggregate information on broader issues may be more
manageable.
e)
Are able to capture the context and process. The relevance of any indicator lies in the context
that it captures- an augmented agricultural productivity could convey both an improvement in soil
quality and an unsustainable increase in the use of chemical fertilizers. For an indicator to be
useful in understanding the dynamics of sustainability and decision making, it should be able to
capture the underlying processes and context which can be made possible only through the
involvement of stakeholders.
f) Are sensitive enough to detect a small change in the system. Even where indicators represent
stock values such as literacy level, these should be chosen such that these are sensitive to tracking
developmental changes at more frequent intervals of time. Thus those indicators should be used
that are sensitive to capturing changes on an annual basis as against those which capture only the
accumulated attainments.
g) Use reliable data, from a credible source.
h) Consisting of small set which is manageable
Performance audits using indicators and targets
27.
If targets and associated indicators are found or thought to be technically sound, comparisons
between them should reveal the progress that has been made. The scope of audit can be as under:
(a)
If the deadline of the target has already passed, an audit can simply comment on whether
the target has been achieved. Audit attention can then shift towards explaining why the
target has or has not been achieved, or the cost and efficiency of the policies used to
attain the target, or any unintended consequences of those policies.
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(b)
If the deadline is still some way off, then an audit should focus on whether the target is
likely to be met if current trends continue.
Indicators – Issues for the Auditor
28.
SAIs will need to address the following issues while taking up this new challenge:
(a)
Role of SAI in developing indicators: should Audit take proactive action like
Government Accountability Organisation of USA (GAO) or review them after they have
been developed? GAO organized a Forum associating academics and other stakeholders
on the issue of key national indicators. This will have the advantage of a prior
consultation and consensus between the auditor and auditee.
(b)
The extent of reliance to be placed on indicators in devising performance audit plans and
in assessing performance of government programmes. For instance, rather than audit a
specific programme or scheme, SAI could select all the programmes and schemes related
to a key indicator.
(c)
Should performance indicators be reviewed as a part of financial audit, particularly if the
audited entity adopts results based budgeting and discloses information on performance
indicators as a part of financial statements?
(d)
How much reliance should the audited entity and audit place on quantitative performance
indicators vis-a-vis qualitative evaluations?
(e)
Should the SAI review the process of developing performance indicators or comment on
the relevance and appropriateness of the indicators?
(f)
How should an SAI deal with situations where there are disagreements among experts
regarding indicators, reliability of statistical information and the resultant performance
evaluations?
(g)
Should an SAI restrict itself to validating the process involved in achieving targets of a
key indicator rather than the value of the indicator? The latter may require techniques and
resources not available with an SAI.
(h)
SAI will need to be cautious in using indicator values in drawing inferences regarding
efficacy of government programmes since several programmes and extraneous factors
would impact indicator values.
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ANNEXURE-I
Mapping of NHDR with OECD indicators
Goals
Economic well
being
OECD Indicators
1. Incidence of extreme poverty
2. Poverty gap ratio
3. Inequality
4.
Universal
Primary
Education
Gender equality
5.
6.
7.
8.
9.
Infant and
Child mortality
Maternal
mortality
10.
11.
12.
13.
Reproductive
health
14.
15.
Environmental
sustainability
and
regeneration
16.
17.
18.
19.
20.
21.
Child malnutrition: prevalence
of under weight under 5s
Net enrolment in primary
education
Completion of 4th grade of
primary education
Literacy rate of 15-24 year olds
Ratio of boys to girls in
primary and secondary
education
Ratio of literate females to
males
Infant mortality ratio
Under 5 mortality ratio
Maternal mortality ratio
Births attended by skilled
health personnel
Contraceptive prevalence
ratio
HIV prevalence in 15 to 24
year old pregnant woman
Countries with effective
process for sustainable
development
Population with access to
safe
water
Forest cover as a % of
national surface area
Biodiversity: land area
protected
Energy efficiency – GDP
per
unit of energy use
Carbon dioxide emission
Reference to NHDR indicator
Incidence of poverty
- ****** Inequality adjusted per capita
consumption expenditure
Inflation and inequality adjusted per
capita consumption expenditure
Nutrition
Net enrolment ratio
Drop out ratio
Adult literacy ratio
Literacy rate (contains details for boys
and girls separately)
Adult literacy rate (contains details for
boys and girls separately)
Infant mortality ratio
Under 5 mortality ratio
Maternal mortality rate
Births attended by health professionals
Birth delivered in medical institutions
Couple Protection ratio
- *******-********-
Access to safe drinking water
Forest cover
- ****** Per capita consumption of electricity
Air pollution
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ANNEXURE-II
Mapping with CSD indicators
Theme
SOCIAL
Equity
Health
Education
Housing
Security
CSD Indicators
Reference to NHDR indicator
% of population below poverty line
Gini Index of income inequality
Incidence of poverty
Inequality adjusted per capita
consumption expenditure
Incidence of unemployment
- ****** -
Unemployment rate
Ratio of average female to male
wage
Nutritional status of children
Mortality rate under 5 years old
Life expectancy at birth
Percent of population with
adequate sewage disposal facilities
Population with access to safe
drinking water
Percent of population with access to
primary health care facilities
Immunization against infectious
childhood diseases
Contraceptive prevalence ratio
Children reaching Grade 5 of
primary education
Adult Secondary Education
Achievement level
Adult Literacy rate
Floor area per person
Number of recorded crime per
100,000 population
Population
Population Growth rate
Population of urban formal and
informal settlements
ENVIRONMENTAL
Atmosphere
Emissions of greenhouse gases
Consumption of ozone depleting
substances
Ambient concentration of air
pollutants in urban areas
Land
Arable and permanent crop land
area
Use of fertilizers
Use of agricultural pesticides
Forest area as per cent of land area
Wood harvesting intensity
Land affected by desertification
Area of urban formal and informal
settlements
Oceans, Seas
Algae concentration in coastal
and coasts
waters
Percent of total population living in
coastal areas
Annual catch by major species
Nutrition
Under five mortality rate
Life expectancy at birth
Access to toilet facilities
Access to safe drinking water
Fully vaccinated child aged 12-23 months
Couple protection rate
Gross enrolment ratio
Net enrolment ratio
Intensity of formal education
Adult Literacy rate
Distribution of households according to
number of rooms occupied
Rate of total cognisable crime
Population growth rate
-*****-
-******-*****Air pollution
-*****-*****-*****Forest cover
-******-******-******-******-*******-******-
10
Fresh water
Biodiversity
ECONOMIC
Economic
structure
Annual withdrawal of ground and
surface water as percentage of total
available water
BOD in water bodies
Concentration of faecal coliform in
freshwater
Area of selected key ecosystems
Protected areas as a % of total area
Abundance of selected key species
GDP per capita
Investment share in GDP
Balance of Trade in goods and
services
Debt to GNP ratio
Total ODA given or received as a
percent of GNP
Consumption
Intensity of material use
and production Annual energy consumption per
and patterns
capita
Share of consumption of renewable
energy sources
Intensity of energy use
Generation of industrial and
municipal solid waste
Generation of hazardous waste
Management of radioactive waste
Water recycling and reuse
Distance travelled per capita by
mode of transport
INSTITUTIONAL
Institutional
National Sustainable development
framework
strategy
Implementation of ratified global
agreements
Number of internet subscribers per
1000 inhabitants
Main telephone lines per 1000
inhabitants
Expenditure on research and
development as a percent of GDP
Economic and human loss due to
natural disasters
-******-
-******-*******-*******-*******-*******Per capita net state domestic product
-*******-*******-*******-*******-*******Per capita consumption of electricity
-*****-*****Urban solid waste
-*****-*****-*****-******-
-******-******-*****-******-******-******-
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