The Comptroller and Auditor General (CAG) of India, provided under Article 148 of the Constitution, is an independent constitutional authority responsible for auditing the accounts of the Union, States, and other bodies. As the “guardian of the public purse,” it plays a crucial role in ensuring transparency, accountability, and fiscal discipline in governance.
Importance of CAG in Indian Polity:
- Constitutional Mandate:
- Articles 148–151 guarantee CAG’s independence and outline reporting procedures.
- CAG’s (Duties, Powers and Conditions of Service) Act, 1971 defines powers and functions.
- Ensures Financial Accountability:
- Audits expenditure from Consolidated Fund, Contingency Fund, and Public Account of India and States.
- For example, CAG’s audit in the 2G spectrum case (2010) estimated a presumptive loss of ₹1.76 lakh crore, triggering major policy reforms.
- Promotes Good Governance:
- Performance audits highlight inefficiencies and recommend corrective action (e.g., CAG audit of MNREGA improved fund utilisation patterns).
- Safeguards Parliamentary Control over Finances:
- Audit reports examined by the Public Accounts Committee (PAC) ensure legislative oversight.
Challenges in CAG’s Functioning:
- Appointment Process Lacks Transparency:
- Sole discretion of the executive creates a conflict of interest.
- IAS officers dominate appointments, marginalising IAAS expertise.
- Limited Scope of Audit:
- Secret Service Expenditure and many PPP projects are excluded.
- Panchayati Raj Institutions often escape detailed scrutiny.
- Procedural & Operational Constraints:
- Post-facto nature of audits limits preventive action.
- Delayed presentation of reports reduces relevance during budget discussions.
- Output reduction: from 221 reports (2010–11) to 73 reports (2018–19).
- Perception Issues:
- Seen as a “policing” mechanism rather than a tool for managerial improvement.
- Allegations of inflated figures (e.g., Coal block allocation loss estimates).
Reforms needed:
- Appointment Mechanism: Adopt a collegium model (PM, LoP, CJI) similar to UK’s joint selection by PM and PAC Chair.
- Expand Audit Coverage: Include PRIs, state-funded societies, and all PPP projects under audit purview.
- Enhance Powers: Empower CAG to conduct pre-audit of high-value defence purchases (> ₹3000 crore). Follow New Zealand model – power to fix liability for losses.
- Time-bound Record Access: Mandate access to records within 7 days, akin to RTI timelines.
- Capacity Building: Training in auditing SDG implementation and emerging sectors like GST and AI-driven governance.
Conclusion:
The CAG’s role is indispensable for fiscal discipline and democratic accountability. Strengthening its independence, widening its audit scope, and ensuring timely, impactful audits will make it a more effective pillar of good governance. As Dr. B.R. Ambedkar observed, “The CAG is the most important officer under the Constitution of India.”
‘+1’ Value addition:
- Decline in number of audit reports from 221 (2010–11) to 73 (2018–19).
- Cases tackled: 2G spectrum case, Coal block allocation case, MNREGA performance audit.
- International Comparison: UK- Pre-audits defence expenditure and MP heads CAG.
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