Mains Marathon 2024

Approach Briefly introduce India's Comptroller and Auditor-General (CAG). Mention the significance and notable contributions of CAG in India. Discuss the challenges faced by the CAG, To conclude, suggest measures to further strengthen the authority of the CAG.

Introduction

The Constitution of India (Article 148) provides for an independent office of the Comptroller and Auditor General of India (CAG). He is the head of the Indian Audit and Accounts Department. He is the guardian of the public purse and controls the entire financial system of the country at both levels–the Centre and the State. His duty is to uphold the Constitution of India and the laws of Parliament in the field of financial administration.

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Significance of the CAG

• Financial Accountability: The CAG audits all government expenditures, ensuring that public funds are used efficiently and for the intended purposes. This oversight helps in identifying financial irregularities and preventing misuse of resources.
  • 2G Spectrum Case (2010): The CAG's report on the allocation of 2G spectrum licenses highlighted a massive loss of revenue due to irregularities and lack of transparency, leading to significant public and political repercussions.
• Transparency: By providing unbiased reports on government finances, the CAG promotes transparency and allows the public and legislators to hold the government accountable.
  • Coal Allocation Scam (2012): The CAG's audit revealed irregularities in the allocation of coal blocks, estimating a substantial loss to the exchequer. This report led to widespread debate and legal action against the involved parties.
• Public Interest: The CAG’s audits often uncover significant financial mismanagement and corruption, protecting public interest and ensuring better governance.
  • National Rural Health Mission (NRHM) Scam (2014): The CAG’s report on the NRHM uncovered significant misuse of funds and poor implementation of the scheme, prompting reforms in the program’s administration.
• Friend of Public Accounts Committee :
  • He acts as a guide, friend and philosopher of the Public Accounts Committee of the Parliament
  • The CAG submits three audit reports to the President–audit report on appropriation accounts, audit report on finance accounts, and audit report on public undertakings. The President lays these reports before both the Houses of Parliament. After this, the Public Accounts Committee examines them and reports its findings to the Parliament
• Propriety Audit: In addition to this legal and regulatory audit, the CAG can also conduct the propriety audit, that is, he can look into the ‘wisdom, faithfulness and economy’ of government expenditure and comment on the wastefulness and extravagance of such expenditure.

Challenges and Criticisms

• Limited Enforcement Power: While the CAG can highlight irregularities, it does not have the power to enforce corrective actions, relying on other governmental bodies to take action based on its reports.
• No Control Over the Issue of Money:
  • The Constitution of India visualises the CAG to be Comptroller as well as Auditor General. However, in practice, the CAG is fulfilling the role of an Auditor-General only and not that of a Comptroller.
  • In other words, the CAG has no control over the issue of money from the consolidated fund and many departments are authorised to draw money by issuing cheques without specific authority from the CAG, who is concerned only at the audit stage when the expenditure has already taken place.
• Government Reluctance: There are instances where the government has been slow or reluctant to implement the CAG's recommendations, reducing the impact of its findings.
• Criticism of Politicization: At times, the CAG has faced criticism for being perceived as politicized, with accusations of bias in its reports.

Conclusion

As an independent entity, the CAG plays a critical role in ensuring financial accountability and transparency in governance. This is the reason why Dr. B.R. Ambedkar said that the CAG shall be the most important Officer under the Constitution of India. Strengthening the CAG’s independence, capacity, and public engagement can further enhance its effectiveness, ensuring that it continues to be a pillar of accountability in the Indian constitutional framework.