CAG of India - Comptroller and Auditor General of India | UPSC Notes on CAG

CAG of India 2022

Girish Chandra Murmu has been named the Current CAG of India and has taken office on August 7, 2020. Before him, on September 25, 2017, Rajiv Mehrishi took over the CAG position in his place.

Girish Chandra Murmu is the Inter-Parliamentary Union's external auditor and the 14th Comptroller and Auditor General of India. He also serves as the chairman of the Asian Organization of Supreme Audit Institutions and the United Nations Panel of External Auditors. He succeeded the Auditor General of the Philippines to become the WHO's external auditor for the year 2020–2023.

What is CAG?

CAG Full Form is the Comptroller and Auditor General of India. According to Article 148 of the Indian Constitution, the Comptroller and Auditor General of India is an independent constitutional body. The competence of the CAG’s office is established by Article 148 of the Indian Constitution. Regarding the founding and authority of the Comptroller and Auditor General, it claims the following:

• The President of India appoints the Comptroller and Auditor General, who can only be dismissed from office in the same way and for the same reasons as a Supreme Court judge.
• The person selected for this post is to take an oath of office in front of the President or any other official who the President's office appoints.
• The Second Schedule contains the salary, service requirements, absences, pension, and retirement age as set by the Indian Parliament, ensuring that neither the compensation nor the service requirements would be changed in a way that disadvantages the incumbent throughout their tenure.
• After their term ends, the CAG is ineligible to hold any additional positions within the Union of India or any State Government.
• The provisions of the Indian Constitution, any Acts of Parliament, as well as the service requirements for the Indian Audits and Accounts Department are susceptible to the powers and duties of the CAG. The President would establish the regulations for these after consulting the incumbent.
• All administrative costs for this office, such as wages, allowances, and pensions, would be allocated to the Consolidated Fund of India.
• Unless they reach 65 years old early, the incumbent is chosen for a term of six years.

Powers of CAG of India 

This office has been granted many privileges and powers that help with the auditing process to enable it to carry out its tasks successfully. The CAG of India has the following principal powers:

• Any office of the companies that are the focus of his audit may be inspected by the Comptroller and Auditor General or members of his staff. He and his team can carefully examine government dealings and interrogate the management on their different facets. The CAG may reconsider his complaints after carefully examining the operations or, if he believes them to be severe, include them in his report that is delivered to Parliament.
• He has complete access to all financial documents, including papers, books, and documents, to help the office carry out this duty efficiently. Furthermore, the CAG is free to request pertinent data from any individual or group. His legal authority to request information and financial records was confirmed by the order issued by the Government of India in 1936 to implement the Act of 1935.

The practice of giving him free access to documents and information continues as of the present. However, a change was made in 1954, requiring that confidential documents be given to the CAG by name and restored as soon as the task is complete if they implicate the central government.

Role of Comptroller and Auditor General of India

This office's responsibility is to respect the financial administration laws passed by Parliament as well as the provisions of the Indian Constitution. Via CAG reports, the executive's accountability to the Parliament in the area of financial operations is ensured. The office oversees and represents the Parliament, conducting expense audits on its behalf.

• The CAG must determine whether the funds listed in the accounts as having been spent were legitimately accessible for and relevant to the service or objective for which they have been allocated or charged, as well as if the spending complies with the legislation that governs it.
• The agency has the authority to conduct a propriety audit, examining the "wisdom, fidelity, and economy" of government spending and making recommendations regarding its squandering. Contrary to the regulatory and legal audit, which the CAG is required to do, the propriety audit is at the CAG's discretion.
• The secret service expense places a restriction on the CAG's ability to conduct audits. In this respect, the CAG cannot request specifics of the expenses paid by the executive agencies; instead, he must consider certification from the appropriate administrative agency attesting to the expenses incurred as stated under his supervision.

According to the Indian Constitution, this position should also serve as the Auditor General. In reality, the incumbent official is merely acting in the capacity of an Auditor-General rather than a Comptroller. To put it another way, the office has no jurisdiction over the release of funds from the public treasury. Numerous agencies are permitted to draw funds by issuing checks without particular approval from the CAG, who is solely engaged at the audit stage after the spending has already occurred.

The Comptroller and Auditor General of India (Duties, Powers and Conditions of Service) Act, 1971 outlines the CAG's authority in relation to audits. This act permits the CAG to audit:

• All income and expenses from the Consolidated Fund of India and the States and Union Territories.
• All operations pertaining to the Public Accounts and Contingency Funds, as well as all manufacturing, trade, balance sheet, profit-and-loss, and other subsidiary entities maintained by any department.
• All government departments and branches' inventories and storage.
• Accounts for all government organizations created under the 1956 Indian Companies Act.
• The financial statements of all union government entities whose Acts require CAG audits.
• Accounts for all agencies and organizations that receive significant funding from the Consolidated Fund Accounts of any agency that are requested by the Governor or President or initiated by the CAG itself while not being significantly financed by the government

Duties of Comptroller and Auditor General of India

The duties and authority of this position are outlined in Articles 148 to Article 151 of the Indian Constitution. An overview of the different topics covered by these Constitutional Articles is provided below:

• Article 149: It defines the powers and duties of the Comptroller and Auditor, like carrying out the responsibilities and exercising the jurisdiction with regard to the financial statements of the Union government, the states, and any other entities or authorities, as may be required by any law passed by the Parliament.
• Article 150: The Union of India and the States' Form of Accounts to establish the format in which the Union and the States' accounts are to be maintained, with the President's permission.
• Article 151: In accordance with Article 279(i) of the Constitution, the CAG is required to determine and verify the net profits of any taxation or duty stated in Chapter I of Part XII of the Constitution. In addition to such constitutional clauses and the Duties Powers and Conditions of Service Act of 1971, it is important to note that, prior to 1976, the CAG was given a dual mandate, combining accounting and auditing. The CAG's responsibility is to audit transactions because of the separation of accounting and audit in 1976. Since 1976, the Indian Civil Accounts Service has assisted different departments in performing their own accounting.

Constitutional Provisions for CAG of India 

Below, a tabulated list has been prepared to brief about the 

List of CAG of India

Narahari Rao was the first CAG of India from 1948 to 1954. In the years following independence, V. Narahari Rao worked as an Indian government servant for the Indian Audit and Accounts Service. For his achievements to the civil service, the Indian government gave him the Padma Bhushan, the third highest civilian honor, in 1954. 

A comprehensive list of CAG of India has been curated below; 

CAG UPSC Notes

Comptroller and Auditor General of India UPSC is an important topic of Indian Polity for UPSC Prelims as well as UPSC Mains point of view. Here we provide comprehensive CAG UPSC Notes which include all important details such as appointment, roles, powers and more. 

You can also download the NCERT Books for UPSC or UPSC Books for Indian Polity from here. 

CAG of India UPSC Question

Question - Prelims Question 2001 - Which one of the following duties is NOT performed by the Comptroller and Auditor General of India?

1. To audit and report on all expenditures from the Consolidated Fund of India.
2. To audit and report on all expenditures from the Contingency Funds and Public Accounts.
3. To audit and report on all trading, manufacturing, profit, and loss accounts.
4. To control the receipt and issue of public money, and to ensure that the public revenue is lodged in the exchequer.

Answer - D

Question - UPSC 2012 - In India, other than ensuring that public funds are used efficiently and for their intended purposes, what is the importance of the office of the Comptroller and Auditor General (CAG)?

1. CAG exercises exchequer control on behalf of the Parliament when the President of India declares a national emergency / financial emergency.
2. CAG reports on the execution of projects or programs by the ministries are discussed by the Public Accounts Committee.
3. Information from CAG reports can be used by investigating agencies to press charges against those who have violated the law while managing public finances.
4. While dealing with the audit and accounting of government companies, CAG has certain judicial powers for prosecuting those who violate the law.

Which of the statements given above is/ are correct?

1. 1, 3, and 4 only
2. 2 only
3. 2 and 3 only
4. 1, 2, 3 and 4

Answer - C