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18 Mar 2025
GS Paper 2
Polity & Governance
Day 8: Discuss the role of the Comptroller and Auditor General (CAG) in overseeing public finance in India. How has it evolved as a watchdog against corruption in governance? (Answer in 200 words)
Approach
- Give a general introduction about the CAG.
- Discuss in detail the role and function of CAG.
- Elucidate how CAG helps in combating corruption and conclude suitably.
Answer
Article 148 of the Indian constitution 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 the levels–the Centre and the state.
Body
Role of Comptroller and Auditor General of India (CAG):
- Article 149 of the constitution authorises the Parliament to prescribe the duties and powers of the CAG in relation to the accounts of the Union and of the states and of any other authority or body.
- He audits the accounts related to all expenditure from the Consolidated Fund of India, states and union territory having a Legislative Assembly.
- He audits all expenditure from the Contingency Fund of India and the Public Account of India as well as states.
- He audits all trading, manufacturing, profit and loss accounts, balance sheets and other subsidiary accounts kept by any department of the Central Government and State Governments.
- He audits the receipts and expenditure of the Centre and each state to secure an effective check on the assessment, collection and proper allocation of revenue.
He audits the receipts and expenditure of the following:
- All bodies and authorities substantially financed from the Central or state revenues;
- Government companies; and Other corporations and bodies, when so required by related laws.
- He audits the accounts of any other authority when requested by the President or Governor. For example, the audit of local bodies.
The CAG plays significant role in good governance and combating corruption:
- Through Public Account Committee (PAC): CAG is the eyes of the PAC; he provides audit reports and guides them through these audit reports. It plays an important role in ensuring financial accountability of executives.
- Through Audit reports: CAG submits his audit reports of the Centre to the President and of the state to the governor, who shall, in turn, place them before Parliament and state legislature respectively. He also audits public sector companies and other government undertakings to ensure public funds are being used prudently.
- Through Anti-corruption measures: CAG reports have been used in the past for unearthing corruption, corrupt practices and impropriation of money.
- For example: 2G spectrum scam came to limelight based on the CAG report.
- Through Propriety Audit: CAG can look into wisdom, faithfulness and economy of government expenditure. He can comment on the wastefulness and extravagance.
Conclusion
The role of CAG is to uphold the Constitution of India and the laws of Parliament in the field of financial administration. The accountability of the executive (i.e., council of ministers) to Parliament in the sphere of financial administration is secured through audit reports of the CAG. Hence, reforms in the office of CAG suggested by former CAG (Vinod Rai) like bringing all private-public partnerships (PPPs), Panchayati Raj Institutions and government-funded societies, within the ambit of the CAG. Also, a collegium-type mechanism to choose a new CAG on the lines of selecting a Chief Vigilance Commissioner (CVC) is of utmost importance
