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COMPTROLLER AND AUDITOR-GENERAL OF INDIA (CAG)

Mar 29, 2022

COMPTROLLER AND AUDITOR-GENERAL OF INDIA (CAG)

Office of the Accountant General was established in 1858 (the year the British took over administrative control of India from the East India Company). In 1860 Sir Edward Drummond was appointed as the first Auditor General. Meanwhile after some restructuring the Auditor General of India came to be called the Auditor and Accountant General to the Government of India. In 1866, the position was renamed Comptroller General of Accounts, and in 1884, it was re-designated as Comptroller and Auditor General of India. Under the Government of India Act 1919, the Auditor General became independent of the government as statutory backing was given for the position. The Government of India Act 1935 further strengthened the position of the Auditor General by providing for Provincial Auditors General in a federal set-up.

CAG is an independent authority under the Constitution of India. He is the head of the Indian audit & account department and chief Guardian of Public purse. It is the institution through which the accountability of the government and other public authorities (all those who spend public funds) to Parliament and State Legislatures and through them to the people is ensured.

Functions and Power of CAG

  • CAG audits the accounts related to all expenditure from the Consolidated Fund of India, Consolidated Fund of each state and UT’s having a legislative assembly.
  • He audits all expenditure from the Contingency Fund of India and the Public Account of India as well as the Contingency Fund and Public Account of each state.
  • He audits all trading, manufacturing, profit and loss accounts, balance sheets and other subsidiary accounts kept by any department of the Central Government and the state governments.
  • He audits the receipts and expenditure of all bodies and authorities substantially financed from the Central or State revenues; government companies; 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 e.g. Local bodies.
  • He advises the President with regard to prescription of the form in which the accounts of the Centre and States shall be kept.
  • He submits his audit reports relating to the accounts of the Centre to the President, who shall, in turn, place them before both the houses of Parliament.
  • He submits his audit reports relating to the accounts of a State to the Governor, who shall, in turn, place them before the state legislature.
  • CAG also acts as a guide, friend and philosopher of the Public Accounts Committee of the Parliament.

Independence of CAG

  • CAG is appointed by the President by warrant under his hand and seal and provided with tenure of 6 years or 65 years of age, whichever is earlier.
  • CAG can be removed by the President only in accordance with the procedure mentioned in the Constitution that is the manner same as removal of a Supreme Court Judge.
  • He is ineligible to hold any office, either under the Government of India or of any state, once he retires/ resigns as a CAG.
  • His salary and other service conditions cannot be varied to his disadvantage after appointment.
  • His administrative powers and the conditions of service of persons serving in the Indian Audit and Accounts Department are prescribed by the President only after consulting him.
  • The administrative expenses of the office of CAG, including all salaries, allowances and pensions are charged upon the Consolidated Fund of India that is not subject to vote.

Constitutional Provisions

  • Article 148 broadly deals with the CAG appointment, oath and conditions of service.
  • Article 149 deals with Duties and Powers of the Comptroller and Auditor-General of India.
  • Article 150 says that the accounts of the Union and of the States shall be kept in such form as the President may, on the advice of the CAG, prescribe.
  • Article 151 says that the reports of the Comptroller and Auditor-General of India relating to the accounts of the Union shall be submitted to the president, who shall cause them to be laid before each House of Parliament.
  • Article 279 – Calculation of "net proceeds" is ascertained and certified by the Comptroller and Auditor-General of India, whose certificate is final.
  • Third Schedule – Section IV of the Third Schedule of the Constitution of India prescribes the form of oath or affirmation to be made by the Judges of the Supreme Court and the Comptroller and Auditor-General of India at the time of assumption of office.
  • According to Sixth Schedule the accounts of the District Council or Regional Council should be kept in such form as CAG, with the approval of the President, prescribe. In addition these bodies account are audited in such manner as CAG may think fit, and the reports relating to such accounts shall be submitted to the Governor who shall cause them to be laid before the Council.

 

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