Model Answer
0 min readIntroduction
Financial administration forms the bedrock of any government, encompassing the raising of revenue, its allocation, expenditure, and accounting. A crucial aspect of good governance is ensuring accountability – the obligation of the executive to explain its actions to the legislature. In India, this accountability in the realm of financial administration is significantly secured through the reports submitted by the Comptroller and Auditor General (CAG), a constitutional body. The CAG acts as an independent auditor, scrutinizing government expenditure and reporting discrepancies to Parliament, thereby enabling legislative oversight and ensuring responsible financial management.
Constitutional Basis and Mandate of the CAG
The CAG is established by Article 148 of the Constitution of India. Its mandate, as outlined in Articles 149-151, is to audit all government accounts – Union, State, and local bodies – and report directly to the President/Governor, who then causes the reports to be laid before Parliament/Legislature. This direct reporting mechanism bypasses the executive, ensuring independence and objectivity.
Types of CAG Reports and their Significance
The CAG submits three primary types of reports:
- Proprietary Reports: These examine the financial propriety of transactions, ensuring adherence to rules and regulations.
- Compliance Reports: These assess whether government expenditure conforms to the provisions of the Constitution, laws, and rules.
- Performance Reports: These evaluate the efficiency and effectiveness of government programs and projects, assessing whether they achieve their intended objectives.
These reports are not merely technical audits; they often highlight instances of corruption, inefficiency, and mismanagement, bringing them to the attention of Parliament.
Parliamentary Mechanisms for Ensuring Accountability
Parliament utilizes several mechanisms to hold the executive accountable based on CAG reports:
- Public Accounts Committee (PAC): This committee, comprising members from both Houses of Parliament, examines the CAG reports in detail and can summon government officials for explanations. The PAC’s recommendations are highly influential.
- Estimates Committee: This committee scrutinizes the budget proposals of various ministries and departments, often referencing CAG findings to assess the feasibility and effectiveness of proposed expenditures.
- Committee on Government Assurances: This committee monitors the implementation of assurances given by ministers in Parliament, often triggered by issues raised in CAG reports.
- Question Hour & Debates: Members of Parliament can raise questions based on CAG findings during Question Hour and initiate debates on specific issues highlighted in the reports.
Illustrative Examples of CAG Reports and their Impact
Several CAG reports have had a significant impact on financial administration and accountability:
- 2G Spectrum Allocation (2010): The CAG report on the allocation of 2G spectrum highlighted irregularities and estimated a loss of ₹1.76 lakh crore to the exchequer. This report triggered a massive political storm and led to the cancellation of licenses by the Supreme Court.
- Coal Block Allocation (2012): The CAG report on coal block allocation estimated a loss of ₹1.86 lakh crore due to non-competitive bidding. This report also led to widespread investigations and legal proceedings.
- Commonwealth Games Scam (2011): The CAG report exposed widespread corruption and irregularities in the organization of the 2010 Commonwealth Games, leading to investigations and the prosecution of several officials.
Limitations and Challenges
Despite its crucial role, the CAG’s effectiveness faces certain limitations:
- Executive Delays: The executive can delay the implementation of CAG recommendations, diminishing their impact.
- Limited Enforcement Powers: The CAG lacks direct enforcement powers; it can only report findings to Parliament.
- Complexity of Issues: Some financial issues are highly complex, making it difficult for Parliament to fully grasp the implications of CAG reports.
- Political Interference: While constitutionally independent, the CAG can face political pressure and criticism.
Strengthening Accountability
To further strengthen accountability, the following measures can be considered:
- Timely Implementation of Recommendations: Establishing a mechanism for the timely implementation of CAG recommendations.
- Strengthening Parliamentary Committees: Providing parliamentary committees with adequate resources and expertise to effectively scrutinize CAG reports.
- Increased Public Awareness: Raising public awareness about CAG reports and their findings.
Conclusion
The CAG reports are undeniably a cornerstone of executive accountability in India’s financial administration. By providing independent and objective audits, the CAG empowers Parliament to scrutinize government expenditure and ensure responsible financial management. While challenges remain, strengthening the mechanisms for implementing CAG recommendations and fostering greater public awareness will further enhance the effectiveness of this crucial constitutional body, contributing to a more transparent and accountable governance system.
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.