Chapter 44: COMPTROLLER AND AUDITOR GENERAL OF INDIA
Created under article
148 of the constitution. He is the head of accounts and
audit department. He
controls financial administration of centre and states.
He is appointed by the
president and hold office for 6 years or till age of 65.
He can be removed by
president on same grounds and manner as SC judge.
He can resign by writing to
president. He is responsible only to parliament. He enjoys
power to frame rules
and decide scope for audit of expenditure but audits
related to other sectors
need approval of executive government.
Legal and regulatory
audit is mandatorily conducted by CAG but propriety
faithfulness and economy’ of expense] is discretionary.
With regard to expense
of secret service the CAG can’t call for particulars of
expenditure but has to
accept the certification from the competent administrative
expense has been incurred under him.
Though the constitution visualises him as
a comptroller but in practice he is just the auditor
He has security of
tenure, his salary and conditions of service are
determined by parliament. He
is ineligible for appointment under Govt of India or state
after ceasing to
hold office. All expense of office is charged on the
consolidated fund of India.
No minister can
represent CAG in parliament nor can any minister be called
responsibility for his actions.
Powers and duties:
These are mentioned in
the act of parliament and constitution.
audits the accounts related to all expenditure from the
Consolidated Fund of India, Consolidated fund of
each state and consolidated fund of each union territory
having a Legislative Assembly.
2. He audits all
expenditure from the Contingency Fund of India and the
Public Account of India as well as the
contingency fund of each state and the public account of
3. 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
4. He audits the
receipts and expenditure of the Centre and each state to
satisfy himself that
the Rules and procedures
in that behalf are designed to secure an effective check
on the Assessment, collection
and proper allocation of revenue.
5. He audits the
receipts and expenditure of the following:
(a) All bodies and
authorities substantially financed from the Central or
(c) Other corporations
and bodies, when so required by related laws.
6. He audits all
transactions of the Central and state governments related
to debt, sinking
funds, Deposits, advances,
suspense accounts and remittance business. He also audits
receipts, stock accounts and others,
with approval of the President, or when required by the
7. He audits the
accounts of any other authority when requested by the
President or Governor. For example, the audit
of local bodies.
8. He advises the
President with regard to prescription of the form in which
the accounts of the Centre and the states
shall be kept (Article 150).
9. He submits his
audit reports relating to the accounts of the Centre to
President, who shall,
in turn; place them
before both the Houses of Parliament (Article 151).
10. He submits his
audit reports relating to the accounts of a state to
governor, who shall, in
turn, place them before the
state legislature (Article 151).
11. He ascertains and
certifies the net proceeds of any tax or duty (Article
279). His certificate is final. The ‘net
proceeds’ means the proceeds of a tax or a duty minus the
cost of collection.
12. He acts as a
guide, friend and philosopher of the Public Accounts
Committee of the Parliament.
13. He compiles and
maintains the accounts of state governments. In 1976, he
was relieved of his responsibilities with
regard to the compilation and maintenance of accounts of
the Central Government due to the
separation of accounts from audit, that is,
departmentalisation of Accounts.
CAG submits three
audit reports to the president who tables them to the
house – appropriation
account, finance account and public undertaking. The
public accounts committee
examines them and submits a report to the house. The
report of audit of public undertakings is submitted to
the public undertakings committee.
With regards to
auditing of accounts of Government companies and
corporations CAG has limited
role they are fully audited by it OR government appoints
private auditors for
them in consultation with CAG, here CAG conducts
supplementary audit OR the
private auditors audit the accounts and no role of CAG
partnerships (PPPs), Panchayti Raj Institutions and
government funds outside the ambit of the CAG.
The amendment further
proposes to enhance CAG’s powers to access information
under the Audit Act.
Documents demanded by CAG officials have often been denied
65 percent of
government spending does not come under the scrutiny of
CAG needs to be a
multi member body elected by a collegiums consisting of
CAG audits often lead
to slow decision making as they create fear of persecution
Also CAG mostly does post mortem work.
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