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UPSC MainsGeneral Studies Paper IIIndian PolityPractice question

Comptroller and Auditor General of India

Discuss the appointment, term, duties and powers of Comptroller and Auditor General of India.

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How to approach

Introduce the constitutional basis of the CAG under Article 148, citing Dr. B.R. Ambedkar's view on the institution. Discuss appointment, tenure, and constitutional safeguards ensuring independence. Detail the duties and powers under Articles 149-151, the 1971 Act, and judicial expansions like PPP audits. Conclude by highlighting institutional challenges and the vital role of CAG in parliamentary oversight.

Model answer

378 words

Introduction

Dr. B.R. Ambedkar described the Comptroller and Auditor General (CAG) under Article 148 as the most important officer under the Constitution of India, serving as the principal bulwark of democratic financial administration and the guardian of the public purse.

Appointment, Term, and Independence

  • Appointment: Appointed by the President of India by warrant under his hand and seal as per Article 148(1).
  • Tenure: Holds office for a term of six years or until attaining the age of 65 years, whichever is earlier. Resignation is addressed to the President.
  • Security of Tenure: The CAG can only be removed by the President in the manner and on the grounds applicable to a Supreme Court judge (Article 124(4))—requiring a special majority in both Houses of Parliament on grounds of proved misbehaviour or incapacity.
  • Post-Retirement Restriction: Ineligible for further office either under the Government of India or the Government of any State after ceasing to hold office, thereby preserving institutional impartiality.

Duties and Powers (Articles 149-151 & CAG Act, 1971)

  • Auditing Authority: Audits all receipts and expenditures from the Consolidated Fund of India, each State, and Union Territories having a Legislative Assembly, as well as the Contingency Fund and Public Account.
  • Types of Audits: Conducts regulatory/compliance audits (ensuring funds are spent according to law) and propriety audits (evaluating wisdom, faithfulness, and economy in public spending).
  • Accounting Responsibilities: Under a 1976 legislative amendment, the CAG was relieved of Union accounting duties to separate audit from accounts, although the compilation of State-level accounts remains within its purview.
  • Expanding Jurisdiction over PPPs: In the Association of Unified Telecom Service Providers Case (2014), the Supreme Court ruled that the CAG has jurisdiction to audit private entities and Public-Private Partnership (PPP) projects where revenue sharing involves state resources.
  • Reporting Mechanism (Article 151): Submits three annual audit reports (Appropriation, Finance, and Public Sector Undertakings) to the President or Governor, who tables them before both Houses of Parliament or State Legislatures. The CAG also functions as a friend, philosopher, and guide to the Public Accounts Committee (PAC).

Conclusion

Despite facing operational constraints such as the post-facto nature of audit, delays in report tabling, and an absence of direct enforcement powers, the CAG remains the linchpin of India's fiscal federalism and legislative oversight, continually adapting through modern performance and environmental audits.

Key facts to remember

quote
“"The CAG is probably the most important officer in the Constitution of India. He is the one man who is going to see that the expenses voted by Parliament are not exceeded, or varied from what has been laid down."”
— Dr. B.R. Ambedkar on the CAG
case study
Association of Unified Telecom Service Providers Case (2014)

The Supreme Court ruled that the CAG is empowered to audit the accounts of private telecom companies operating under revenue-sharing agreements involving natural resources, establishing that audit follows the flow of public revenue.

scheme
Comptroller and Auditor General's (DPC) Act, 1971

The statutory framework enacted by Parliament pursuant to Article 149 that defines the conditions of service, detailed powers, and auditing duties of the CAG for the Union, States, and statutory bodies.

Frequently asked questions

Why was the CAG relieved of accounting responsibilities in 1976?

The CAG was relieved of compiling Union accounts through an amendment in 1976 to enforce the principle of separation of powers between executive financial management and independent external auditing.

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