Comptroller & Auditor General
Kartavya Desk Staff
Syllabus: Polity
- •Source: PIB*
Context: During the 4th Audit Diwas event in New Delhi, Lok Sabha Speaker Shri Om Birla highlighted the critical role of the Comptroller & Auditor General (C&AG) in promoting accountability, transparency, and good governance.
About Comptroller and Auditor General of India (CAG):
Basics:
• Independent Constitutional Office: Established under Article 148, CAG ensures accountability in public financial administration.
• Guardian of Public Purse: Oversees the entire financial system at both Central and State levels.
• Appointment and Tenure: Appointed by the President by warrant under his hand and seal. Holds office for six years or until age 65, whichever is earlier.
• Appointed by the President by warrant under his hand and seal.
• Holds office for six years or until age 65, whichever is earlier.
• Salary and Service Conditions: Determined by Parliament and charged upon the Consolidated Fund of India.
• Non-Eligibility for Further Office: Post-retirement, the CAG cannot hold office under Central/State Governments.
Relevant Articles:
• Article 149: Parliament defines CAG’s duties and powers.
• Article 150: Determines the format of Union and State accounts on CAG’s advice.
• Article 151: CAG reports submitted to the President and laid before Parliament.
• Article 279: Certifies net proceeds of taxes, binding on the government.
Powers and Duties of CAG:
• Audit Financial Transactions: Audits expenditures from the Consolidated, Contingency, and Public Accounts of India and states. Also examines receipts, debts, and remittances of the government.
• Scrutiny of Revenue: Ensures effective rules for revenue assessment, collection, and allocation.
• Audit of Local Bodies: Audits transactions of local authorities and government-funded bodies upon request.
• Formulation of Accounts: Advises the President on the format for maintaining Union and State accounts.
• Reporting to Legislatures: Submits audit reports to the President (Centre) and Governors (States) for legislative scrutiny.
• Public Accounts Committee Role: Acts as a guide and advisor to PAC, assisting in scrutinizing government expenditures.
Challenges and Issues:
• Limited Powers: Cannot enforce compliance for timely information.
• Ambiguity in Scope: Lack of clarity on auditing Public-Private Partnerships (PPPs) and power distribution companies.
• Secret Service Expenditure: Cannot audit such expenditures; relies on administrative certifications.
• Delays in Reporting: Significant reduction in CAG reports over recent years.
• Conflict of Interest: Appointment process influenced by the Executive, raising transparency concerns.
• Single-Member Structure: Debate on converting the CAG into a multi-member body for better decision-making.
Recommendations for Reform
• Expand Audit Scope: Include PPPs, Panchayati Raj Institutions, and government-funded societies.
• Strengthen Appointment Process: Create a collegium-style mechanism for CAG selection.
• Enhance Powers: Amend the CAG Act of 1971 to include punitive measures for non-compliance.
• Timely Access to Information: Mandate access to records within seven days; penalize undue delays.
• Transparency and Independence: Adopt international best practices to ensure independence in selection and functioning.
• Capacity Building: Equip CAG to audit emerging areas like SDGs and Goods and Services Tax (GST).
Conclusion:
The CAG is indispensable for ensuring financial accountability and transparency in governance. Strengthening its powers and operational framework will enhance its effectiveness, fostering public trust in fiscal administration.
Insta Links:
• Comptroller-and-auditor-general-of-India
• “The Comptroller and Auditor General (CAG) has a very vital role to play.” Explain how this is reflected in the method and terms of his appointment as well as the range of powers he can exercise. (150 words, 10 marks)