The Comptroller and Auditor General of India
The Comptroller and Auditor General (CAG) is the supreme audit institution of India and one of the most important constitutional bodies. The office audits the accounts of the Union and the states and reports to the President and the Governors, who place those reports before Parliament and the state legislatures. The CAG is often described as the guardian of the public purse, and its reports form the basis of legislative scrutiny of government spending. This topic covers the constitutional articles, the appointment and removal of the CAG, the nature of its duties and the different types of audit it conducts.
Constitutional Basis of the CAG
The office of the CAG is established by Article 148 of the Constitution, which says that there shall be a Comptroller and Auditor General of India. The following articles complete the scheme:
- Article 148: establishment of the office, appointment by the President, and the conditions of service.
- Article 149: duties and powers of the CAG, as may be prescribed by Parliament. Parliament enacted the Duties, Powers and Conditions of Service Act, 1971, commonly called the DPC Act, to give effect to this article.
- Article 150: the accounts of the Union and the states shall be kept in the form prescribed by the President on the advice of the CAG.
- Article 151: the CAG's reports relating to the accounts of the Union shall be submitted to the President, and those relating to the states to the Governor, and they shall be laid before the legislature.
The CAG is the head of the Indian Audit and Accounts Department and its decisions are independent of the executive.
Appointment and Tenure
The CAG is appointed by the President of India by warrant under his hand and seal. The CAG holds office for six years or until attaining the age of 65 years, whichever is earlier. The salary and conditions of service of the CAG are determined by Parliament and cannot be varied to the CAG's disadvantage after appointment. The CAG is not eligible for any further office under the Government of India or under any state after ceasing to hold the office. This restriction is meant to secure independence. The first CAG after the commencement of the Constitution was V. Narahari Rao.
Removal of the CAG
The CAG can be removed from office only in the same manner and on the same grounds as a judge of the Supreme Court. This requires a motion alleging proved misbehaviour or incapacity, supported by a special majority in both Houses of Parliament and an address to the President. This makes the CAG one of the most protected constitutional functionaries and ensures that the office cannot be removed for political reasons. The independence safeguards, the fixed tenure, the security of salary and the bar on further employment together make the CAG's office truly independent.
Duties and Powers of the CAG
The CAG's primary duty is to audit and report on the accounts of the Union, the states and the Union Territories, as well as the accounts of government companies, corporations and autonomous bodies. The CAG examines whether money was spent for the purpose for which it was granted, whether the expenditure was authorised and whether it was economical and effective. The CAG also has an accounting role: at the Union level the CAG compiles and maintains the accounts of the government, while in the states the accounts are generally maintained by the state governments under the advice of the CAG. The CAG also has an advisory role and can be consulted on accounting matters.
Why the CAG is Called Comptroller in Name Only
The title Comptroller and Auditor General suggests that the officer both controls and audits. In Britain the Comptroller and Auditor General controls the issue of money from the Consolidated Fund, but in India the CAG does not exercise this controlling function over the issue of money from the treasury. The CAG only audits the accounts after the money has been spent. This is why it is said that the CAG in India is a Comptroller in name only, and its real function is audit. The DPC Act of 1971 lays down the powers and duties in detail.
Types of Audit
- Audit of appropriation accounts: it verifies that money spent was legally available and applied to the purpose for which it was granted.
- Audit of finance accounts: it shows the receipts and expenditure of the government and the resulting surplus or deficit.
- Audit of government companies and corporations: it examines the accounts of public sector undertakings and autonomous bodies.
- Audit of receipts and expenditure: it checks both the collection of revenue and the spending of public money.
Reports and Parliamentary Control
Under Article 151, the CAG's reports are submitted to the President at the Union level and to the Governor at the state level. They are then laid before Parliament or the state legislature. The reports are examined by the Public Accounts Committee (PAC) and other financial committees. The PAC scrutinises the findings and reports to the House. It must be remembered that the CAG's reports are advisory in nature: they inform and guide the legislature, but the decisions of the PAC and the legislature are not binding on the executive in a legal sense. In practice, however, CAG reports carry great moral and political weight.
The CAG and Federalism
The CAG is a federal officer in a special sense: it audits the accounts of both the Union and the states. This gives the office a key role in maintaining fiscal accountability across the federation. At the same time, the CAG submits separate reports to the President and the Governors, and the state reports are examined by the state legislature. This dual role is one reason why the CAG is considered one of the strongest safeguards of the parliamentary system of financial control.
The CAG in Relation to Assam
The CAG audits the accounts of the Government of Assam and its public sector undertakings, including the state's power companies and other statutory bodies. Its reports on Assam are submitted to the Governor of Assam and laid before the Assam Legislative Assembly, where they are examined by the state Public Accounts Committee. Local bodies such as panchayats and municipal bodies, which receive large grants from the state and central governments, are also subject to CAG audit. For candidates preparing for state-level examinations, this linkage between the CAG and the state's finances is an important point.
Significance for Competitive Examinations
The CAG is a favourite topic of examiners. Questions are asked on the articles relating to the office, the appointing authority, the tenure and age limit, the manner of removal, the DPC Act of 1971, the meaning of the description "guardian of the public purse", the CAG's role as a comptroller in name only, the first CAG and the submission of reports to the President and the Governor. Since the CAG links the Constitution with public finance and the legislature's control over the executive, it is a high-scoring topic in both general studies and state-specific papers.
How to Prepare This Topic
- Memorise the four articles: 148 (office), 149 (duties), 150 (form of accounts) and 151 (reports).
- Learn the tenure: six years or until 65 years, whichever is earlier.
- Remember that removal is on the same grounds as a Supreme Court judge.
- Note the DPC Act, 1971 as the law detailing powers and duties.
- Understand the distinction between control of the issue of money and audit after expenditure.
- Revise the FAQ answers and attempt the questions on this page.
Common Exam Traps
- The CAG can be removed in the same manner as a Supreme Court judge, not a High Court judge.
- The tenure is the earlier of six years or 65 years of age.
- The CAG is not eligible for further office under the Government of India or a state.
- In India the CAG is a comptroller in name only; it does not control the issue of money from the treasury.
- Reports go to the President for the Union and to the Governor for a state, and are then laid before the legislature.
Frequently Asked Questions
Which article establishes the office of the Comptroller and Auditor General?
Article 148 of the Constitution establishes the office of the Comptroller and Auditor General of India. It provides that the President shall appoint the CAG, and lays down the conditions of service. Articles 149, 150 and 151 deal with duties, the form of accounts and the submission of reports respectively.
What is the tenure of the CAG and how can the CAG be removed?
The CAG holds office for six years or until attaining the age of 65 years, whichever is earlier. The CAG can be removed only in the same manner and on the same grounds as a judge of the Supreme Court, that is, for proved misbehaviour or incapacity, by a special majority of both Houses of Parliament and an address to the President.
Why is the CAG called a comptroller in name only in India?
The CAG is called a comptroller in name only because, unlike the Comptroller and Auditor General in Britain, the CAG in India does not control the issue of money from the Consolidated Fund. In India the CAG audits the accounts after the money has been spent, and the real function of the office is audit rather than control.
What is the role of the CAG's reports in Parliament?
Under Article 151 the CAG's reports on Union accounts are submitted to the President and those on state accounts to the Governor, and they are then laid before Parliament or the state legislature. The reports are examined by the Public Accounts Committee and other financial committees, and they form the basis of legislative scrutiny of government spending. The reports are advisory in nature but carry great weight.
Which law lays down the duties and powers of the CAG?
Article 149 provides that the duties and powers of the CAG shall be prescribed by Parliament. Parliament enacted the Duties, Powers and Conditions of Service Act, 1971, commonly called the DPC Act, to lay down the detailed duties, powers and conditions of service, including the audit of government companies, corporations and autonomous bodies.