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Comptroller and Auditor General (CAG) Of India

The CAG represents one of our nation's most fundamental constitutional authorities. According to Dr. B.R. Ambedkar, this particular constitutional institution is by far the most essential if we guarantee the smooth operation of our democracy and the nation as a whole. One of the core elements of democracy, along with the Supreme Court, Election Commission, and Union Public Service Commission, is the institution of the comptroller and auditor general (CAG).

In this post, we'll talk about what a CAG is, how the Indian CAG was chosen, the duties it will carry out, problems with CAG, and other related information.


  • We have picked the position of CAG from the United Kingdom, much like many other bodies and sections of the constitution. Historically, the office of CAG was employed by the British when they ruled India. Even today the office of CAG exists in United Kingdom.
  • However, the CAG in the UK and the CAG in India differ significantly from one another.
  • It is possible to envision that the office of CAG to have two roles, namely the Comptroller and the Auditor General.
    • If you look closely, it serves two distinct purposes.
    • A comptroller is a person who is in charge of the government's treasury, without whose approval the government cannot make any financial decisions.
    • An auditor, on the contrary side, is a professional who checks the financial documents of the government.
  • Both of these duties are performed by the CAG office in the UK, which also oversees the management of public funds. To rephrase this, the CAG must sanction all spending made by the British government.The UK government requests CAG approval before making any financial decisions. Thus, in the UK, the CAG serves as both the comptroller and the auditor general.
  • However, in India, the situation is slightly different.
    • In India, the CAG's duty doesn't start until after the government has already spent the money.
    • Even though we adopted the full title of Comptroller and Auditor General from the UK, we only have auditor-level authority.
    • In India, the CAG cannot prevent the government from spending money.
    • Still, they can issue reports on how the government has used the money, whether it was legal, whether there were any irregularities, etc.
  • Government accountability for how and where it spends taxpayer money is crucial for any successful and affluent nation. And CAG ensures this. It examines whether or not the funds allocated for the purpose were used for that reason.
  • Articles 148 to 151 outline provisions related to CAG, the constitutional office.
  • Articles related to Comptroller and Auditor General of India

About CAG

Articles pertaining to India's Comptroller and Auditor General

Article number Subject
148 India's Comptroller and Auditor General
149 Comptroller and Auditor General responsibilities and authority
150 Form of accounts of the Union and the States
151 Audit reports

India's Comptroller and Auditor General

  • Following article 148 of the Constitution, the Comptroller and Auditor General of India will have an autonomous authority.
  • According to this, he is acknowledged as responsible for the Indian Audit and Accounts Department.
  • He supervises the nation's overall monetary system at the Union and State divisions and functions as the protector of the public purse.
  • He upholds the parliament's financial administration rules and the Indian Constitution.

The appointment of India's Comptroller and Auditor General

A proclamation incorporating the President of India's stamp and seal gets to appoint the CAG.

Indian Comptroller and Auditor General's Terms of Service

  • The CAG Act of 1971 outlines the terms and conditions of the CAG's service.
  • For six years or until they reach age 65, whichever comes sooner, CAG occupies the position.
  • He can step down from his position by writing a note of resignation to the President.
  • He is subject to dismissal by the President based on similar conditions as Supreme Court judges. As an outcome of a motion voted by both chambers of parliament with a special majority and substantiated by either misbehaviour or incapacity, he may be ousted by the President.
  • The CAG makes the same amount of money as a Supreme Court judge.

Independence of the office of Comptroller and Auditor General of India

The constitution includes specific safeguards to ensure that the CAG has sufficient independence for its job because it is such an important position.

  • He has tenure security given to him.
    • For example, the removal of CAG is challenging.
    • The mechanism for removing the CAG is the same as that used to expel Supreme Court judges.
    • This implies that the expulsion of CAG requires a special majority in the parliament, which is challenging.
  • The Consolidated Fund of India is responsible for paying the CAG's administrative costs, which include all employee wages, benefits, and pensions. They do not go before parliament for a vote.
  • Like many other constitutional posts, the CAG's pay cannot be cut during service.
  • There is no possibility of the CAG being recruited again. This indicates that after the CAG's six-year term is up, it will no longer be eligible for selection.
  • The CAG cannot support the administration in the hopes of being reappointed.
  • The CAG's salary is a chargeable expense to India's consolidated fund. This indicates that the CAG can conduct without intervention from the government and that the salary is not subject to a parliamentary vote.
  • After consulting with CAG, the president only prescribes the requirements for the employees of IA&AS (Indian Audit and Account Services).

All of the provisions, as mentioned earlier, are designed to guarantee that the individual working in the CAG office has sufficient autonomy and is not reliant on the federal government to function.

Powers and Duties of India's General Auditor and Comptroller

  • The parliament has the power to stipulate the powers and responsibilities of the CAG regarding the finances of the Union of the States and any additional entity or authority, as stated in article 149 of the Indian Constitution.
  • As a result, the parliament passed the CAGs Act in 1971. To isolate the accounting from audits in the central government, this act was revised in 1976.
  • The department's responsibilities include inspecting and monitoring all trading, manufacturing, profit-and-loss, financial statements, and other subsidiary accounts maintained by the Union and state governments.
  • The goods and stores are audited as well.
  • Even because CAG is a lone individual, this does not indicate that he conducts all of these responsibilities alone. He supervises hundreds of employees, who will work together to execute these duties. One individual oversees the entire CAG organization.
  • When summoned by the President or the governor, the CAG is also tasked with inspecting institutions and organizations that receive large government funding, although not substantial.
  • The CAG also inspects public sector undertakings and government-owned enterprises.
  • The CAG also provides guidelines on how the states and the federal government should organize their accounting information.
  • The CAG aids the Finance Commission, another constitutional authority, in gathering information and forming an educated opinion about state government finances.
  • He serves as their instructor, friend, and philosopher on a public account committee.
  • The government is also given the net proceeds statement under Article 279(1).
  • In addition, the CAG delivers to the President three audit findings: one on appropriation accounts, one on accounting records, and one on public undertakings.
  • These reports are delivered to both chambers of parliament by the President.
  • The Public Accounts Committee then investigates them and informs parliament of its conclusions.
  • In compliance with article 150 of the Indian Constitution, he gives recommendations to the President on the guidelines for the framework in which the Central and state accounts shall be maintained.
  • He provides his audited accounts for the centre accounts to the President, who then presents them to both chambers of parliament, following article 151 of the constitution.
  • The CAG's responsibility is to uphold the Indian Constitution and the legislation passed by the parliament in financial governance.
  • The executive's obligation to the parliament in financial administration is guaranteed through the CAG's audit reports.
  • The CAG performs expenditure audits on behalf of the parliament as an agent of that body. He only has to answer to the parliament, therefore.

Types of Audits Performed by CAG

1. Compliance Audit

  • The compliance audit proves that the funds used were authorized by the budget and used for the intended purpose.
  • Consider that the Indian government requested 500 crore rupees for the MGNREGA program in the parliament.
    • The CAG will then determine whether the funds were used exclusively for MGNREGA or other purposes.
    • Whether or not the request was complied with by the government.
    • It is called a compliance audit.

2. Financial Audit

  • Let's assume that the government used the funds following its stated intentions.
  • The CAG will examine whether or not the government has kept an appropriate record of those transactions.
  • The CAG further confirms whether or not the reports are kept up to date according to the standards set by the CAG.
  • It is referred to as a financial audit conducted by the CAG.
  • It guarantees that accurate books of accounts are kept and that they accurately reflect the real transactions.

3. Efficiency Audit

  • Consider that the Indian government has requested 6000 crore rupees to erect a statue.
  • In this step, CAG determines whether or not they may complete the identical activity with a smaller expenditure.
  • Suppose the CAG concludes that the government could complete the project for significantly less money.
  • In that case, it suggests that the government wasted resources and money, negotiated improperly with the contractors, and hired more employees than necessary.
  • All of this indicates that the government diminished the project's efficiency.
  • It is the CAG's efficiency audit.

4. Propriety Audit

  • This auditing study casts doubt on the prudence, honesty, and economy of financial judgments.
  • It is a significant topic of controversy and discussion concerning the CAG office.
  • Think about the previous illustration, when the Indian government paid 500 crore rupees to construct a statue.
  • The CAG decides whether it was required to build the statue in the first place through the report. Or if the funds may have been applied elsewhere.
  • But what controversy surrounds propriety auditing?
    • In the end, India is a democratic country. Meaning that the country's elected government has the authority to make decisions, including those involving the use of public funds.
    • Regardless of how prominent the CAG is, they are appointed rather than elected members.
    • Because they were elected to office by the people, the elected representative can spend the money in any way they see fit under the democratic system.
    • The real issue with a propriety audit is how the CAG can determine what is necessary and what is not.
    • The discretion to spend money will be taken by the government.
    • It is a significant source of worry as well.

Issues in Comptroller and Auditor General Office

We know that the President of India appoints the CAG of India based on suggestions and counsel from the Council of Ministers. The problem is that it is suggested that a proper committee be established with experts from various sectors and representation from outside the government, which should then make recommendations to the President of India regarding who should serve as the next CAG. Because the political party in control, which is now in charge of the government, makes the recommendations. As a result, they select someone close to them to serve as the CAG of India. It is done to prevent the CAG from looking into their actions. Nobody exists to ensure the CAG nomination process is transparent because, in the end, every government wants someone to hold this job. These are the main concerns concerning the CAG office.

The role of the Comptroller and Auditor General is nevertheless vital in despite of these challenges.

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