Comptroller and Auditor General of India (CAG)
The Comptroller and Auditor General (CAG) of India is an independent constitutional authority responsible for auditing the accounts of the Union and State Governments. Established under Article 148 of the Constitution, the CAG is the head of the Indian Audit and Accounts Department and acts as the guardian of the public purse. It oversees the entire financial system of the country at both the Union and State levels, ensuring that public funds are collected and spent in accordance with the Constitution and laws enacted by Parliament.
The CAG plays a crucial role in promoting financial accountability, transparency, and legislative oversight of executive expenditure. Recognising its significance, Dr. B.R. Ambedkar described the CAG as “the most important Officer under the Constitution of India.” Along with the Supreme Court, Election Commission, and UPSC, the CAG is regarded as one of the key pillars safeguarding India’s democratic system.
Constitutional Status
- Article 148 – Establishment, appointment and independence of the CAG.
- Article 149 – Duties and powers of the CAG
- Article 150 – Accounts of the Union and States shall be kept in the form prescribed by the President on the advice of the CAG.
- Article 151 – Audit reports of the CAG to be submitted to the President/Governor and laid before Parliament/State Legislature.
Appointment And Tenure
Appointment
- Appointed by the President of India by warrant under his hand and seal.
Oath
- The oath or affirmation of the Comptroller and Auditor General (CAG) of India is given in the Third Schedule of the Constitution of India.
- The CAG, before taking over his/her office, makes and subscribes before the President an oath or affirmation:
- to bear true faith and allegiance to the Constitution of India;
- to uphold the sovereignty and integrity of India;
- to duly and faithfully and to the best of his/her ability, knowledge and judgement perform the duties of his/her office without fear or favour, affection or ill-will; and
- to uphold the Constitution and the law
Tenure
- Six years or until attaining the age of 65 years, whichever is earlier.
Resignation
- Can resign by writing to the President.
Removal
- The Comptroller and Auditor General (CAG) enjoys a high degree of security of tenure to ensure independence from executive interference.
- CAG can be removed by the President only in the same manner and on the same grounds as a Judge of the Supreme Court.
- CAG can be removed by the President on the basis of a resolution passed to that effect by both the Houses of Parliament with special majority, either on the ground of proved misbehaviour or incapacity.
- Resolution must be passed by both Houses of Parliament with a special majority:
- Majority of the total membership of the House, and
- Two-thirds of the members present and voting.
- Grounds of removal:
- Proved misbehaviour
- Incapacity
Independence of the CAG
To ensure that the Comptroller and Auditor General (CAG) functions independently and without executive interference, the Constitution provides the following safeguards:
- Security of Tenure
- The CAG can be removed only in the same manner and on the same grounds as a Judge of the Supreme Court.
- Thus, CAG does not hold office during the pleasure of the President, though he/she is appointed by him/her.
- No Further Government Employment
- After demitting office, the CAG is not eligible for any further office under the Union or State Governments.
- Protected Service Conditions
- Salary and service conditions are determined by Parliament.
- According to the Act made by the Parliament, the salary of the CAG is equivalent to that of a Judge of the Supreme Court.
- No Disadvantageous Alteration
- Salary, pension, leave rights, and retirement age cannot be altered to the CAG’s disadvantage after appointment.
- Administrative Autonomy
- The conditions of service of personnel in the Indian Audit and Accounts Department and the administrative powers of the CAG are prescribed by the President after consultation with the CAG.
- Financial Independence
- The administrative expenses of the CAG’s office, including salaries, allowances, and pensions, are charged upon the Consolidated Fund of India.
- Therefore, they are not subject to the vote of Parliament.
Significance
These safeguards ensure that the CAG remains an independent constitutional authority, capable of auditing government finances objectively and acting as the guardian of the public purse without fear or favour.
Duties And Powers
Constitutional Basis
- Article 149 empowers Parliament to prescribe the duties and powers of the CAG.
- Accordingly, Parliament enacted the CAG’s (Duties, Powers and Conditions of Service) Act, 1971.
General Provisions Relating to Audit
It shall be the duty of the CAG:
- to audit all expenditure from the Consolidated Fund of India and of each State and of each Union territory having a Legislative Assembly and to ascertain whether the moneys shown in the accounts as having been disbursed were legally available for and applicable to the service or purpose to which they have been applied or charged and whether the expenditure conforms to the authority which governs it;
- to audit all transactions of the Union and of the States relating to Contingency Funds and Public Accounts;
- to audit all trading, manufacturing, profit and loss accounts and balance-sheets and other subsidiary accounts kept in any department of the Union or of a State; and in each case to report on the expenditure, transactions or accounts so audited by him.
Audit of receipts and expenditure of bodies or authorities substantially financed from Union or State Revenues
- The CAG audits the receipts and expenditure of any body or authority substantially financed by grants or loans from:
- Consolidated Fund of India,
- Consolidated Fund of a State, or
- Consolidated Fund of a Union Territory having a Legislative Assembly.
Functions of Comptroller and Auditor-General in the Case of Grants or Loans given to other Authorities or Bodies
- The CAG audits the accounts of all bodies and authorities receiving grants and loans from the central and state government for specific purposes.
Audit of Receipts of Union or of States
- It shall be the duty of the Comptroller and Auditor-General to audit all receipts which are payable into the Consolidated Fund of India and of each State and of each Union territory having a Legislative Assembly and to satisfy himself that the rules and procedures in that behalf are designed to secure an effective check on the assessment, collection and proper allocation of revenue and are being duly observed and to make for this purpose such examination of the accounts as he thinks fit and report thereon.
Audit of accounts of stores and stock
- The CAG has the authority to audit and report on the accounts of stores and stock kept in any office or department of the Union or of a State.
Audit of Government companies and corporations
- The CAG audits of the accounts of Government companies in accordance with the provisions of the Companies Act, 1956 .
- The CAG audits the accounts of statutory corporations, other than companies, established by or under a law made by Parliament, according to the provisions of their respective Acts.
Audit of accounts of certain authorities or bodies
- The CAG audits the accounts of any other body or authority when requested by the President or Governor. For example, the audit of local bodies.
Advisory Role on Government Accounts
- Advises the President regarding the form in which Union and State accounts should be maintained (Article 150).
Submission of Union Audit Reports
- Submits audit reports relating to Union accounts to the President.
- The President places them before both Houses of Parliament (Article 151).
Submission of State Audit Reports
- Submits audit reports relating to State accounts to the Governor.
- The Governor places them before the State Legislature (Article 151).
Certification of Net Proceeds of Taxes
- Ascertains and certifies the net proceeds of taxes and duties (Article 279).
- The certificate of the CAG is final.
Compilation of State Accounts
- CAG compiles and maintains accounts of State Governments.
- Since 1976, compilation of Central Government accounts has been separated from CAG following departmentalisation of accounts.
Advisor to Public Accounts Committee (PAC)
- Acts as the Guide, Friend and Philosopher of the Public Accounts Committee (PAC).
Powers of Comptroller and Auditor-General in connection with Audit of Accounts
- The CAG has the power to:
- Inspect any office of accounts under the Union or State Government, including treasuries and offices maintaining accounts.
- Call for accounts, books, papers, and documents relevant to the transactions under audit and require them to be produced for inspection.
- Seek information and explanations from the officer in charge and ask any questions necessary for preparing audit reports and accounts.
- The officer in charge of any office or department audited by the CAG must provide all necessary facilities for inspection and furnish the required information, records, and documents as completely and promptly as possible.
Role of the Comptroller and Auditor General (CAG)
- The CAG safeguards the Constitution and Parliamentary laws in the field of financial administration.
- It ensures the financial accountability of the Executive to Parliament through its audit reports.
Audit Reports Submitted by the CAG
- The CAG submits three reports to the President:
- Audit Report on Appropriation Accounts
- Audit Report on Finance Accounts
- Audit Report on Public Sector Undertakings (PSUs)
- The President places these reports before Parliament, after which the Public Accounts Committee (PAC) examines them and submits its findings.
Types of Audit Conducted by the CAG
- Legal and Regulatory Audit (Mandatory)
- Examines whether public money was spent for the purpose approved by law.
- Verifies whether expenditure conforms to the authority governing it.
- Propriety Audit (Discretionary)
- Examines the wisdom, faithfulness, and economy of government expenditure.
- Highlights wasteful, extravagant, or improper spending.
- Performance Audit
- Audits the economy, efficiency, and effectiveness of government programmes.
- Objectives of Performance Audit
- Assess the extent to which the intended social and economic objectives have been achieved and at what cost.
- Examine whether the concerned department or agency is properly discharging its financial responsibilities.
- Verify whether schemes and programmes are being implemented and operated economically and efficiently.
Special Features
- The CAG enjoys greater autonomy in auditing expenditure than in auditing receipts, stores, and stock.
- In expenditure audits, the CAG can determine the scope of audit and frame its own audit codes and manuals.
- However, for audits of receipts, stores, and stock, the rules and procedures require the approval of the executive government.
Limitations
Secret Service Expenditure
- Secret service expenditure is beyond the detailed scrutiny of the CAG.
- The CAG cannot demand details of such expenditure from executive agencies.
- It has to rely on a certificate from the competent administrative authority stating that the expenditure was incurred under its authority.
CAG Functions mainly as an Auditor, not a Comptroller
- Although the Constitution envisages the CAG as both a Comptroller and Auditor General, in practice it functions mainly as an Auditor General.
- The CAG has no control over the withdrawal of money from the Consolidated Fund of India.
- Government departments can draw funds without prior approval of the CAG.
- The CAG examines expenditure only after it has been incurred (post-audit).
Difference from the British CAG
- In India, the CAG conducts only a post-expenditure audit.
- In Britain, the CAG acts as both Comptroller and Auditor General.
- The British Government cannot withdraw money from the public exchequer without the prior approval of the CAG.
Conclusion
The Comptroller and Auditor General of India occupies a pivotal position in India’s constitutional architecture as the guardian of public finances and an instrument of legislative oversight. Through financial, propriety and performance audits, the CAG promotes transparency, accountability and fiscal discipline in governance. While certain limitations exist, particularly regarding secret service expenditure and the absence of pre-expenditure control, the institution remains one of the strongest safeguards against misuse of public resources. In an era of expanding public expenditure and complex welfare programmes, a robust and independent CAG is indispensable for strengthening democratic accountability and ensuring responsible governance.
FAQs
1. Who appoints the Comptroller and Auditor General (CAG) of India?
The CAG is appointed by the President of India through a warrant under his hand and seal under Article 148 of the Constitution.
2. What is the tenure of the CAG?
The CAG holds office for six years or until attaining the age of 65 years, whichever is earlier.
3. Under which Article is the CAG established?
The CAG is established under Article 148 of the Constitution of India.
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