Comptroller and Auditor General of India

Role of Comptroller and Auditor General of India

The Comptroller and Auditor General of India (CAG) is an independent institution established by the Indian Constitution (Article 148). He is the Indian Audit and Accounts Department’s head. He is the keeper of the public purse and oversees the country’s whole financial system at both the federal and state levels. In the field of financial administration, it is his responsibility to uphold the Indian Constitution and the rules of Parliament. This is why, according to Dr. B.R. Ambedkar, the CAG will be the most important officer under the Indian Constitution. He, along with the Supreme Court, the Election Commission, and the Union Public Service Commission, is one of the pillars of India’s democratic administration.

Term and Appointment

The CAG is appointed by a warrant signed and sealed by India’s president. Before taking office, the CAG takes an oath or affirmation before the president to: 1. bear true faith and allegiance to the Constitution of India; 2. uphold the sovereignty and integrity of India; 3. to duly and faithfully perform the duties of his office to the best of his ability, knowledge, and judgment without fear or favour, affection or ill-will; and 4. to uphold the Constitution and the laws.

He is in office for six years or until he reaches the age of 65, whichever comes first. He can resign from his position at any moment by writing a resignation letter to the president. He can also be removed by the president for the same reasons and in the same way that a Supreme Court judge can. In other words, he can be dismissed by the president if both Houses of Parliament pass a resolution to that effect with a special majority, either on the basis of proven misbehavior or incapacity.


The following clauses in the Constitution protect and preserve the independence of the CAG:
1. He is guaranteed a job for the rest of his life. He can only be removed by the president through the procedures outlined in the Constitution. As a result, despite being appointed by the president, he does not hold office until the president’s pleasure.
2. After resigning from his position, he is ineligible for any other position in the Indian government or in any state.
3. The Parliament determines his salary and other working conditions. His remuneration is comparable to that of a Supreme Court judge.
4. His salary, as well as his rights to leave of absence, pension, and retirement age, cannot be changed to his detriment after his appointment.
5. After consultation with the CAG, the president prescribes the conditions of service for personnel serving in the Indian Audit and Accounts Department, as well as the CAG’s administrative authorities.
6. The Consolidated Fund of India is charged with the administrative expenses of the CAG’s office, including all wages, allowances, and pensions of those employed in that office. As a result, they are not subject to parliamentary approval.

Furthermore, no minister may represent the CAG in Parliament (both Houses), and no minister can be held accountable for any acts he takes.

Responsibilities and Authority

The Constitution (Article 149) empowers Parliament to define the CAG’s responsibilities and powers in connection to the Union’s and states’ accounts, as well as any other authority or entity. As a result, the CAG’s (Duties, Powers, and Conditions of Service) Act, 1971 was adopted by Parliament. In 1976, this Act was revised to separate accounting and auditing in the federal government.

The CAG’s responsibilities and functions are as follows, as defined by Parliament and the Constitution:
1. He audits all expenditure accounts from the Consolidated Fund of India, each state’s consolidated fund, and each union territory’s consolidated fund with a Legislative Assembly.
2. He audits all expenditures from the Indian Contingency Fund and the Indian Public Account, as well as the contingency funds and public accounts of each state.
3. He audits all central government and state government commerce, manufacturing, profit and loss accounts, balance sheets, and other subsidiary accounts.
4. He audits the Centre’s and each state’s receipts and expenditures to ensure that the laws and procedures in place are designed to ensure an effective check on revenue assessment, collection, and proper allocation.
5. He audits the receipts and expenditures of the following entities: (a) all bodies and authorities that receive major funding from the federal or state government; (b) government companies; and (c) other corporations and bodies, as required by applicable laws.
6. He examines all debt, sinking funds, deposits, advances, suspense accounts, and remittance business operations of the federal and state governments. He also audits receipts, stock accounts, and other accounts with the President’s approval or when the President requests it.
7. When the President or Governor requests it, he audits the accounts of any other authority. Consider the audit of municipal governments.
8. He advises the President on the prescription of the form in which the Centre’s and states’ accounts are to be kept (Article 150).
9. He provides his audit findings pertaining to the Centre’s accounts to the President, who then presents them to both Houses of Parliament (Article 151).
10. He presents his audit reports on a state’s accounts to the governor, who then presents them to the state legislature (Article 151).
11. He determines and verifies the net earnings of all taxes and duties (Article 279). His diploma is the last word. The ‘net revenues’ of a tax or duty are the proceeds minus the expense of collection.
12. He serves as a counselor, companion, and philosopher to the Parliament’s Public Accounts Committee.
13. He prepares and manages state government accounts. Due to the separation of accounts from audit, or departmentalisation of accounts, he was freed of his responsibilities for the compilation and maintenance of Central Government accounts in 1976.

The CAG presents the President with three audit reports: one on appropriation accounts, one on finance accounts, and one on public undertakings. These reports are presented by the President to both Houses of Parliament. The Public Accounts Committee then investigates them and reports to Parliament on its findings.

The appropriation accounts compare actual spending to spending authorized by Parliament through the Appropriation Act, whereas the finance accounts indicate the Union government’s annual receipts and disbursements.


In the sphere of financial administration, the CAG’s mission is to protect the Indian Constitution and the legislation of Parliament. The CAG audit reports ensure that the executive (i.e., the council of ministers) is accountable to Parliament in the area of financial administration. The CAG is a Parliamentary agency who conducts expenditure audits on the Parliament’s behalf. As a result, he is only accountable to the Parliament.

When it comes to auditing expenditures, the CAG has more leeway than when it comes to auditing receipts, stores, and stock. “Whereas he determines the scope of the audit and creates his own audit codes and manuals in respect to expenditure, he must seek executive government permission for regulations governing the conduct of the other audits.”a

The CAG’s job is to “determine whether money reported as having been disbursed in the accounts was legally available for and appropriate to the service or purpose to which they have been applied or charged, and whether the expenditure conforms to the authority that governs it.” In addition to the legal and regulatory audits, the CAG can perform a propriety audit, in which he examines the ‘wisdom, faithfulness, and economy’ of government spending and makes recommendations on waste and excess. The propriety audit, on the other hand, is optional, unlike the legal and regulatory audit, which is required of the CAG.

The CAG’s auditing role is hampered by the secret service expenditure. In this case, the CAG cannot demand specifics of expenditures made by executive agencies, but must accept a certificate from the appropriate administrative authority stating that the expenditures were made under his jurisdiction.

The CAG is both Comptroller and Auditor General, according to the Indian Constitution. In reality, however, the CAG merely performs the functions of an Auditor-General and not a Comptroller. In other words, “the CAG has no control over the issue of money from the consolidated fund,” and “many departments are authorized to draw money from the consolidated fund by issuing checks without specific authorization from the CAG, who is only concerned at the audit stage when the expenditure has already occurred.” In this regard, the CAG of India differs significantly from the CAG of the United Kingdom, who has both Comptroller and Auditor General functions. In other words, in the United Kingdom, the executive can only take money from the public purse with the CAG’s permission.

CAG and Corporation

In the auditing of public enterprises, the role of the CAG is limited. In general, his interactions with government agencies can be divided into three categories:

(I) Some corporations, such as Damodar Valley Corporation, Oil and Natural Gas Commission, Air India, Indian Airlines Corporation, and others, are audited completely and directly by the CAG.
(ii) Private professional auditors are appointed by the Central Government in consultation with the CAG to audit some other firms. A supplementary audit can be conducted by the CAG if necessary. Central Warehousing Corporation, Industrial Finance Corporation, and others are examples.
(iii) Some other businesses are completely audited by private firms. In other words, their audit is conducted solely by private professional auditors, with no involvement from the CAG. They present their annual reports and finances to Parliament directly. Life Insurance Corporation of India, Reserve Bank of India, State Bank of India, Food Corporation of India, and others are examples of such corporations.
The CAG’s role in auditing government-owned businesses is equally limited. They are audited by private auditors appointed by the government based on the CAG’s recommendations. Such companies can also be subjected to additional or test audits by the CAG.

An Audit Board was established as part of the CAG’s office in 1968 to bring in outside experts and specialists to handle the technical aspects of auditing specialized industries such as engineering, iron and steel, chemicals, and so on. The Administrative Reforms Commission of India recommended the formation of this board. It is made up of a Chairman and two CAG-appointed members.

Appleby’s Criticism

In his two findings on Indian Administration, Paul H Appleby slammed CAG’s job and questioned the value of his work. He also urged that the CAG be freed of the auditing responsibilities. In other words, he advocated for the office of CAG to be abolished. The following are his criticisms of Indian auditing:

  1. The role of the CAG in India is largely a legacy of colonial governance.
  2. The CAG is now a major factor in the pervasive and paralyzing inability to make decisions and take action. Auditing has a restrictive and harmful impact.
  3. The Parliament has an overblown view of the relevance of auditing to parliamentary accountability, and as a result, the CAG’s functions have not been defined as the Constitution intended.
  4. The CAG’s role isn’t particularly significant. Auditors don’t know much about good administration and can’t be expected to; their prestige is strongest among those who don’t know much about administration.
  5. Auditors are aware of the difference between auditing and administration; auditing is a necessary but pedestrian duty with a small scope and limited utility.
  6. A department’s deputy secretary knows more about the department’s difficulties than the CAG and his entire team.

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