Comptroller and Auditor General of India

Comptroller and Auditor General of India is a constitutional authority under Indian Polity responsible for auditing the accounts of the Union and State governments. It acts as the guardian of public finances, ensuring transparency, accountability, and proper utilization of government funds. Established under Article 148 of the Constitution, the CAG plays a vital role in upholding financial discipline in governance.

Comptroller and Auditor General of India: Role and Importance

• Under Article 148, the independent constitutional post of CAG (Comptroller and Auditor General of India) has been established.
• It is called the Auditor General in short.
• He is the head of the Indian Audit and Accounts Department.
• Its function is to monitor the financial activities of the Central and State Governments by becoming the guardian of public finance.
• According to Dr. Bhimrao Ambedkar, “The Comptroller and Auditor General of India (CAG) is perhaps the most important officer in the Indian Constitution. He is the one who sees that money is not spent beyond the limits permitted by Parliament or is spent only on the items specified by Parliament in the Appropriation Acts.”
• The Comptroller and Auditor General of India (Duties, Powers and Conditions of Service) Act, 1971 is based on it.
• Motto – “Integrity for the Public Interest” 

Historical background1858–

• The office of the Accountant General was established, in the same year the British took over the administrative control of India from the East India Company.
• 1860– Sir Edward Drummond was appointed the first Auditor General.
• After some time this post came to be known as the Auditor General and Accountant General of the Government of India.
• 1866– The name of this post was changed to Comptroller of Accounts.
• 1884 – It was renamed as the Comptroller and Auditor General of India (CAG of India).
• Government of India Act, 1919 –The CAG was freed from government control as the post was given statutory status.
• Government of India Act, 1935– Provincial auditors were provided in the federal structure, and the post of CAG was made more powerful.
  • It also mentioned the appointment and service procedures. A brief description of the duties of the Auditor General was also included.
• 1936– Audit & Accounts Order was issued, which defined the responsibilities and audit functions of the CAG.
  • This system remained unchanged until 1947.
• 1947 (after independence)- Article 148 of the Indian Constitution provides that the Comptroller and Auditor General shall be appointed by the President.
• 1958– Jammu and Kashmir was also included in the jurisdiction of CAG.
• 1971– The Central Government enacted the Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act, 1971.
  • The Act gave the CAG the responsibility of both accounting and auditing for the Central and State governments.
• 1976– CAG was relieved of accounting functions, and entrusted with auditing only.

Articles related to the Comptroller and Auditor General of India Articles

(148-151)

Part-5

Article	Theme
148	Comptroller and Auditor General of India
149	Duties and powers of the Comptroller and Auditor General of India
150	Form of accounts of the Union and of the States
151	audit Report

Other related provisions

• Article 279 –
  • The calculation of ‘Net Proceeds’ is certified by CAG.
  • Its certificate is considered final and binding.
• Third Schedule –
  • Its Section IV provides for the oath to be taken by the CAG and the Judges of the Supreme Court at the time of assuming office.
• Sixth Schedule –
  • The accounts of the District Council or Regional Council must be kept in a form approved by the President and the CAG.
  • The accounts of these bodies will be prepared in the manner prescribed by the CAG.
  • The CAG report relating to these accounts will be submitted to the Governor, who will then lay it before the State Legislature.

Article 148 – Comptroller and Auditor General of India (CAG): Appointment, Oath and Related condition and service

Removal process

• Which posts are applicable?
  • Judges of the High Court and the Supreme Court.
  • Chief Election Commissioner.Comptroller and Auditor General (CAG).
  • grounds for removalmisbehaviormisuse of officeincapacity
• Process
  • A resolution must be passed by the Parliament.
  • The motion will be passed only if:
    • Voting should be more than 50% of the total members of the House.
    • A special majority of 2/3 of the members present and voting should support it.
• Use of the term impeachment
  • The word ‘impeachment’ has not been used in the Constitution in the case of judges, Chief Election Commissioner and CAG.
  • The term ‘impeachment’ is used only for the process of removing the President.
• To remove the President:
  • A special majority of 2/3 of the members of both the Houses of Parliament present and voting is required.
  • This procedure applies only to the President and not to any other post.

Duties and powers of the Comptroller and Auditor General of India(Article 149)

CAG and Public Accounts Committee –

• Background of the Public Accounts Committee
  • The Public Accounts Committee (PAC) is a standing parliamentary committee.
  • It was formed under the Government of India Act, 1919.
• Relationship between CAG and PAC
  • Submission of audit reports
  • The audit reports of the CAG are submitted to the Public Accounts Committee at the Centre and State levels.
  • At the central level, the CAG submits its report to the President.
  • The President places these reports on the table of both the Houses of Parliament.
• Checking reports
  • The Public Accounts Committee mainly examines the following:
  • Appropriation Accounts
  • Finance Accounts
• Audit Reports of Public Sector Undertakings (PSUs)
  • List of important cases
  • The CAG prepares a list of the most urgent and important matters and submits it to the Public Accounts Committee.
• Role and collaboration
  • The CAG also sometimes interprets and translates the views expressed by politicians and government officials.
• Monitoring of corrective action
  • CAG ensures that the corrective action suggested by it is implemented or not.
  • If corrective action is not taken, the CAG refers the matter to the Public Accounts Committee.
  • Thereafter, the PAC takes necessary action.
• Conclusion :The Comptroller and Auditor General of India’s primary functions are to audit the accounts of the central and state governments, monitor receipts and expenditures, and submit reports on the accounts to Parliament and state legislatures. The CAG plays a key role in monitoring government financial transparency and correct spending.

Recommendations of the Second Administrative Reforms Commission (ARC) 

1. Ensuring better cooperation and interaction between audit and related institutions for improved public accountability and audit control;
2. Balanced audit reporting;
3. Establishing seamless communication with the executive for better coordination;
4. Maintaining timeliness in submitting audit reports;
5. Use of information technology for better and effective data collection and analysis;
6. And initiating corrective action based on SIT audit reports.

Article 150 – Form of Articles of the Union and of the States

• The format of the accounts of the Union and the States is decided by the President.
• The President consults the CAG in this process.

Article 151 – Audit report

• Article 151(1) – The Comptroller and Auditor General of India (CAG) reports relating to the accounts of the Union shall be presented to the President. The President shall cause these reports to be laid before each House of Parliament. It is considered the “eyes and ears” of the Public Accounts Committee.
• Article 151(2) – The report relating to the accounts of the States shall be presented to the Governor, who shall cause it to be laid before the Legislature of the State.
• Three major audit reports presented by the CAG:
  1. Audit Report on Appropriation Accounts: This report presents a comparison between actual expenditure and the expenditure approved by Parliament through the Appropriation Act.
  2. Audit Report on Finance Accounts: This report presents an account of the annual receipts and expenditure of the Central Government.
  3. Audit Reports on Public Undertakings: This report audits the financial affairs of government undertakings.
     • The CAG’s reports are presented to both houses of Parliament by the President. The Public Accounts Committee then examines these reports and presents its findings to Parliament.
• Committee on Public Undertakings (COPU) –
  • Examines the CAG’s observations on the efficiency and performance of Public Sector Undertakings (PSUs).
  • That is, COPU examines the PSU audit reports of CAG.

Estimates Committee

• Its function is to test budget estimates.
• It sees whether the money given to the government is being used efficiently or not.
• But does not examine CAG reports.

Role and Responsibilities of the Comptroller and Auditor General (CAG)

• The CAG is responsible for the maintenance of the Constitution of India and parliamentary law in the field of financial administration. The financial administration of the executive (Council of Ministers) is ensured through the CAG’s audit reports.
• CAG is an agent of the Parliament and audits the expenditure through the Parliament, hence he is answerable only to the Parliament.

Independence and responsibility of CAG:

• The CAG has greater independence in auditing expenditures. It sets its own auditing codes and regulations. However, it must obtain approval from the executive government for other audits.
• The CAG ensures that funds legally allocated for a specific purpose are spent for that purpose. It also examines the rationality, integrity, and economy of government expenditures.

Limits on Secret Service Expenses:

• The CAG cannot demand details of secret service expenditure, but can accept a certificate certifying that the expenditure was incurred within the approved authority.

Limitations of the role of CAG:

1. The Constitution of India envisages the CAG as the Auditor General. However, in practice the CAG performs only the role of Auditor General.
2. The Comptroller and Auditor General (CAG) has no control over withdrawals from the Consolidated Fund of India. Various departments can withdraw funds without the CAG’s approval. The CAG’s role is limited to auditing expenditures.

CAG and Audit of Corporations:

• The role of the Comptroller and Auditor General (CAG) in India is limited to auditing public corporations and government companies. This can be seen in the following three aspects:

Straightforward and complete audit

• Some corporations are audited entirely by the CAG.
• Example: Damodar Valley Corporation, Oil and Natural Gas Commission (ONGC), Air India, Indian Airlines Corporation

Audit by professional auditors (on the advice of CAG)

• Certain other corporations are audited by private professional auditors, who are appointed by the Central Government on the advice of the CAG.
• If necessary, the CAG can conduct supplementary audit of these corporations.
• Example: Central Warehousing Corporation, Industrial Finance Corporation

Private audit

• Some corporations are audited entirely by private professional auditors, and the CAG has no role in it.
• These corporations present their annual reports and accounts directly to the Parliament.
• Example:Life Insurance Corporation, Reserve Bank of India, State Bank of India, Food Corporation of India

Audit of Government Companies

• The role of CAG is also limited in the audit of government companies.
• These companies are audited by private auditors, who are appointed by the government on the advice of the CAG.
• CAG can conduct supplementary audit or check audit of these.

Establishment of Audit Board

• The Audit Board was established in 1968 under the office of the CAG.
• This Board appoints outside experts to look into the technical aspects of audit of specialized enterprises like engineering, iron and steel, chemicals etc.
• This board was constituted on the recommendation of the Indian Administrative Reforms Commission.
• This board consists of a chairman and two members, who are appointed by the CAG.

Major challenges for the Comptroller and Auditor General (CAG)

1. Limited knowledge of administration
2. Complexity of the audit
3. Increasing responsibilities
4. Fear of biased appointment
5. Practical challenges
6. Late access to records
7. Term limits
8. Allegations of biased auditing

Key reforms suggested by former CAG Vinod Rai

1. Public-Private Partnership (PPP) projects, Panchayati Raj Institutions and Government-funded institutions
2. Amendments to the CAG Act of 1971
3. Collegium system

Criticism by Paul H. Appleby (Criticism of the CAG)

1. Colonial legacy
2. Reluctance to make decisions
3. Extremism of parliamentary responsibility
4. The work of CAG is not important.
5. Auditing is not administration
6. Greater knowledge of departmental officers

Audit Advisory Board-

• This board advises the Comptroller and Auditor General (CAG) on audit matters such as approach, techniques, coverage, scope and priorities.
• Its members serve on an honorary basis.
• The 12th Audit Advisory Board has been constituted for a period of two years from July 16, 2025.
• Chairman- Shri K. Sanjay Murthy, (Comptroller and Auditor General of India)

Comptroller and Auditor General of India

1	V. Narahari Rao	(1948-1954)	He was the first CAG of independent India.
2	A. K. Chanda	(1954-1960)
3	A. K. Roy	(1960-1966)
4	S. Ranganathan	(1966-1972)
5	A. Bakshi	(1972-1978)
6	Gyan Prakash	(1978-1984)
7	Triloki Nath Chaturvedi	(1984-1990)	Later he also became the Governor of Karnataka.
8	C. G. Somaiya	(1990-1996)
9	V. K. Shunglu	(1996-2002)
10	V. N. Kaul	(2002-2008)
11	Vinod Rai	(2008-2013)	CAG reports with market-criticism investigations like 2G spectrum and coal allocation made national headlines.
12	Shashi Kant Sharma	(2013-2017)
13	Rajiv Maharshi	(2017-2020)	The only officer who has served as Home Secretary, Finance Secretary and Chief Secretary before becoming CAG.
14	Girish Chandra Murmu	(2020-2024)	He was also the first Lieutenant Governor of Jammu and Kashmir.
15	K Sanjay Murthy	From November 21, 2024 to…2029