Comptroller and Auditor General of India: Guardian of Public Finances and Pillar of Accountability

Dr. B.R. Ambedkar said that the CAG shall be the most important officer under the constitution of India. It is often said that CAG is one of the pillars of the democratic system of government in India. Govind Bhattacharjee is a big critic of CAG but at the same time he also argues if strengthened properly it can become one of the best constitutional body of India.

Constitutional Provisions Related to the CAG Under Article 148, The Constitution of India provides for an independent office of the Comptroller and Auditor General of India (CAG). CAG is the head of the Indian Audit and Accounts Department, the guardian of the public purse and controls the entire financial system of the country at both the levels–the Centre and the state. His/Her duty is to uphold the Constitution of India and the laws of Parliament in the field of financial administration.

Constitutional and legal provisions pertaining to the office of CAG?

Articles	Description
Article 148	Appointment: There shall be a Comptroller and Auditor General(CAG) of India who shall be appointed by the President by warrant under his hand and seal.Salary and other conditions of service: determined by Parliament by law.Further office/reappointment: not eligible for further office under both central as well as state government.Expenditure charged upon CFI: The entire expense, including the salaries, allowances, and pensions of the CAG and persons serving in that office, is charged upon the Consolidated Fund of India (CFI).
Article 149	Duties and powers to be determined by Parliament: The CAG shall perform such duties and exercise such powers as may be prescribed by or under any law made by Parliament.
Article 150	Form of accounts of union and states: The accounts of the union and of the states shall be kept in such form as the President may, on the advice of the CAG, prescribe.
Article 151	Reports of CAG: The reports of the CAG relating to the accounts of the union shall be submitted to the President, who shall cause them to be laid before each House of Parliament.
Article 279	Certification of net proceeds: He ascertains and certifies the net proceeds of any tax or duty. His certificate is final. The ‘net proceeds’ means the proceeds of a tax or a duty minus the cost of collection.
Comptroller and Auditor General of India (Duties, Powers, and Conditions of Service) Act, 1971	Tenure: He holds office for a period of six years or upto the age of 65 years, whichever is earlier.Resignation: He can resign any time from his office by addressing the resignation letter to the President.Removal: He can be removed by the President on the same grounds and in the same manner as a judge of the Supreme Court.Condition of service: His salary and service conditions are determined by Parliament and can’t be varied to his disadvantage after his appointment

Duties and Powers of CAG?

The Constitution (Article 149) authorizes the Parliament to prescribe the duties and powers of the CAG in relation to the accounts of the Union and of the states and of any other authority or body. Accordingly, the Parliament enacted the CAG’s (Duties, Powers, and Conditions of Service) Act, 1971. The duties and functions of the CAG as laid down by the Parliament and the Constitution are as follows:

• He audits the accounts related to all expenditures from the Consolidated Fund of India, the consolidated fund of each state, and the consolidated fund of each union territory having a Legislative Assembly.
• He audits all expenditures from the Contingency Fund of India and the Public Account of India as well as the contingency fund of each state and the public account of each state.
• He audits all trading, manufacturing, profit, and loss accounts, balance sheets, and other subsidiary accounts kept by any department of the Central Government and state governments.
• He audits the receipts and expenditures of the Centre and each state to satisfy himself that the rules and procedures on that behalf are designed to secure an effective check on the assessment, collection, and proper allocation of revenue.
• He audits all transactions of the Central and state governments related to debt, sinking funds, deposits, advances, suspense accounts, and remittance business. He also audits receipts, stock accounts, and others, with the approval of the President or when required by the President.
• He audits the accounts of any other authority when requested by the President or Governor. For example, the Audit of local bodies.
• He advises the President with regard to the prescription of the form in which the accounts of the Centre and the states shall be kept.
• He submits his audit reports relating to the accounts of the Centre to the President, who shall, in turn, place them before both Houses of Parliament.
• He submits his audit reports relating to the accounts of a state to the governor, who shall, in turn, place them before the state legislature.

Role of CAG in the Public Accounts Committee (PAC)

The CAG submits three audit reports to the President– on appropriation accounts, on finance accounts, and on public undertakings.

• PAC examines the reports of CAG: The President lays these reports before both houses of Parliament. The PAC examines these reports and submits its findings to the Parliament.
• Ensuring checks and balances: CAG helps PAC to ensure a check on the government, especially with respect to its expenditure bill.
• Ensuring accountability: The CAG assists the PAC in examining these reports. Thus, there is a close working relationship between CAG and PAC to secure the accountability of the executive in the field of financial administration and fiscal federalism.
• CAG as a guide to PAC: CAG acts as a guide, friend, and philosopher of the Public Accounts Committee of the Parliament.
• Corrective action: CAG ensures that the corrective action suggested by him has been taken. In cases where it has not been taken, CAG reports the matter to the PAC, which will take up the matter.
• Interpreter and translator: CAG acts as interpreter and translator, explaining the officials’ views to the politicians and vice-versa.
• Listing the urgent matters: CAG prepares a list of the most urgent matters which deserve the attention of the PAC.

Criticisms of CAG

• Govind Bhattacharjee in his article “CAG could have done better” argues that no other constitutional authority has such an arbitrary & opaque procedure for appointment where the government of the day has the sole prerogative of appointing the CAG. He also points towards the decline in the number of reports submitted by the CAG which is creating serious doubts over its independence. According to him, it has been found that CAG is engaged in selective auditing of centrally sponsored schemes like MGNREGA, NHM etc. MGNREGA auditing has not been done since 2013.
• Jasmine Nihalani argues that on average, 22 reports were tabled each year in the 2019-2023 period compared to 40 in the 2014-2018 period. She also points towards manpower shortage (as of 2021-2022, the Indian Audit and Accounts Department had a staff strength of 41,675 a steady decline from the peak of 48,253 in 2013-14.
• Vinod Rai former CAG of India suggests that a collegium type mechanism should be placed for appointment to CAG. He also suggests amendment to CAG Act of 1971.

Conclusion

The Comptroller and Auditor General (CAG) of India stands as a pivotal institution in the nation’s governance structure, ensuring financial accountability, transparency, and control over public expenditure. While the CAG has been empowered by the Constitution to act independently and to audit government accounts at both central and state levels, challenges persist. Critics emphasize the need for reforms in appointment procedures, manpower allocation, and audit scope to safeguard and enhance the CAG’s independence and effectiveness. Strengthening this office could solidify its position as a robust check on executive power, enabling it to more effectively uphold the principles of fiscal accountability and democratic integrity. A strong CAG ensures that public funds are used judiciously, promoting a trustworthy, transparent government, which is essential for India’s democratic health.