Model Answer
0 min readIntroduction
The Comptroller and Auditor General (CAG) of India is a constitutional authority established by Article 148 of the Constitution of India. Often referred to as the ‘guardian of the public purse’, the CAG plays a crucial role in ensuring financial accountability of the government. It audits the accounts of the Union and State governments, including bodies and authorities substantially financed by public funds. In a democratic setup, where public funds are utilized for welfare schemes and development projects, the CAG’s independent scrutiny is paramount to maintain transparency and prevent misuse of resources, thereby enhancing public trust and good governance.
Constitutional Basis and Appointment
Article 148-151 of the Constitution deals with the CAG. The CAG is appointed by the President of India on the recommendation of the Parliament. The CAG enjoys the same rank as a judge of the Supreme Court. This high constitutional status ensures its independence from the executive branch. The term of office is typically five years or until retirement age, whichever is earlier. Removal requires a similar process as that of a Supreme Court judge – a petition to Parliament.
Functions of the CAG
The CAG performs a wide range of functions, broadly categorized as:
- Audit of Government Accounts: This includes audit of all receipts and expenditures of the Union and State governments.
- Audit of Public Sector Undertakings (PSUs): The CAG audits the accounts of PSUs, ensuring they operate efficiently and transparently.
- Audit of Authorities and Bodies: It audits bodies and authorities substantially financed by the government.
- Reporting to Parliament/State Legislatures: The CAG submits its reports directly to the President/Governor, who then causes them to be laid before Parliament/State Legislatures.
Enhancing Accountability – Mechanisms
Performance Audit
The CAG conducts performance audits, which assess whether government programs and policies are achieving their intended objectives efficiently and effectively. This goes beyond simply checking financial transactions; it evaluates the impact of government spending. For example, the CAG’s performance audit of the National Rural Employment Guarantee Scheme (NREGS) in 2011 highlighted issues of improper implementation and leakages of funds.
Compliance Audit
Compliance audits verify whether government transactions adhere to legal provisions and rules. This ensures that funds are spent in accordance with established procedures. The CAG’s audit of the 2G spectrum allocation in 2010, which estimated a loss of ₹1.76 lakh crore to the exchequer, is a prime example of a compliance audit leading to significant public and political repercussions.
Financial Audit
Financial audits focus on the accuracy and reliability of financial statements. They ensure that government accounts are maintained correctly and that financial irregularities are detected.
Real-Time Monitoring & Data Analytics
The CAG is increasingly leveraging technology, including data analytics and real-time monitoring systems, to enhance its audit capabilities and detect fraud more effectively. The implementation of the Integrated Database for Audit and Accounts (IDAA) is a step in this direction.
Impact of CAG Reports
CAG reports have often triggered investigations, policy changes, and even legal action. The 2G spectrum scam, the Coal allocation scam (highlighted in CAG report of 2012 estimating a loss of ₹1.84 lakh crore), and the Commonwealth Games irregularities are prominent examples where CAG reports played a pivotal role in exposing corruption and prompting corrective measures.
Limitations and Challenges
Despite its significant role, the CAG faces certain challenges:
- Limited Power to Enforce Recommendations: The CAG can only submit reports and recommendations; it lacks the power to directly enforce them.
- Political Interference: Although constitutionally independent, the CAG can sometimes face political pressure.
- Complexity of Government Operations: The increasing complexity of government operations and financial transactions makes auditing more challenging.
- Capacity Constraints: Maintaining a skilled and adequately staffed audit workforce is an ongoing challenge.
Conclusion
The Comptroller and Auditor General of India is an indispensable pillar of India’s democratic governance. By meticulously scrutinizing government finances and operations, the CAG enhances accountability, promotes transparency, and safeguards public funds. While facing challenges, its constitutional mandate and evolving audit techniques continue to make it a vital watchdog, ensuring that the government remains answerable to the people. Strengthening the CAG’s independence and empowering it with greater enforcement capabilities will further bolster its effectiveness in the years to come.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.