• Another pivotal office in the Government of India is that of Comptroller and Auditor-General who controls the entire financial system of the country-at the Union as well as State levels.

  • As observed by Ambedkar, the Comptroller and Auditor-General of India shall be the most important officer under the Constitution of India for, he is to be the guardian of the public purse and it is his duty to see that not a farthing is spent out of the Consolidated Fund of India or of a State without the authority of the appropriate Legislature.

  • In short, he shall be the impartial head of the audit and accounts system of India.

  • In order to discharge this duty properly, it is highly essential that this office should be independent of any control of the Executive.

  • He is thus excepted from the general rule that all civil servants of the Union hold their office at the pleasure of the President

  • His salary and conditions of service shall be statutory (i.e., as laid down by Parliament by law) and shall not be liable to variation to his disadvantages during his term of office. Under this power, Parliament has enacted the Comptroller and Audnor-General's (Conditions of Service) Act, 1971.

  • The Comptroller and Auditor-General shall perform such duties and exercise such powers In relation to the accounts of the Union and of the States as may be prescribed by Parliament, In exercise of this power, Parliament has enacted the Comptroller and Auditor-General's (Duties, Powers and Conditions of Service) Act, 1971, which. as amended in 1976, relieves him of his pre Constitution duty to compile the accounts of the Union; and the States may enact similar legislation with the prior approval of the President,-to separate accounts from audit also at the State level, and to relieve the Comptroller and Auditor-General of his responsibility in the matter of preparation of accounts, either of the States or of the Union.

  • The duty of preparing the accounts was a relic of the Government of India Act. 1935, which has no precedent in the British system, under which the accounts are prepared, not by the Comptroller and Auditor-General, but by the respective Departments.

  • The legislation to separate the function of preparation or accounts from the Comptroller and Auditor-General of India, thus, brings this office at par with that of his British counterpart in one respect,

  • But there still remains another fundamental point of difference. Though the designation of his office indicates that be is to function both as Comptroller and Auditor, our Comptroller and Auditor-General is so far exercising the functions only of an Auditor.

  • In the exercise of his functions as Comptroller, the English Comptroller and Auditor-General controls the receipt and issue of public money and his duty is to see that the whole of the public revenue Is lodged in the account of Exchequer at the Bank of England and that nothing is paid out of that account without legal authority.

  • The Treasury cannot, accordingly obtain any money from the public Exchequer without a specific authority from the Comptroller, and, this be issues on being satisfied that there is proper legal authority for the expenditure.

  • This system of control over issues of the public money not only prevents withdrawal for an unauthorised purpose but also prevents expenditure in excess of the grants made by Parliament

  • In India, the Comptroller and Auditor-General has no such control over the issue of money from the Consolidated Fund and many Departments are authorised to draw money by Issuing cheques without specific authority from the Comptroller and Auditor-General, who is concerend only at the audit stage when the expenditure has already taken place.

  • This system is a relic of the past, for, under the Government of India Acts, even the designation 'Comptroller' was not there and the functions of the Auditor General were ostensibly confined to audit.

  • After the commencement of the Constitution, it was thought desirable that our Comptroller and Auditor General should also have the control over issues as in England, particularly for ensuring that "the grants voted and appropriations made by Parliament are not exceeded".

  • But no action has as yet been taken to introduce the system of Exchequer Control over issues as It has been found that the entire system of accounts and financial control shall have to be overhauled before the control can be centralised at the hands of the Comptroller and Auditor- General

  • The first is whether in exercising his function of audit, the Comptroller and Auditor-General has the jurisdiction to comment on extravagance and suggest economy, apart from the legal authority for a particular expenditure.

  • The orthodox view is that when a statute confers power or discretion upon an authority to sanction expenditure, the function of audit comprehends a scrutiny of the propriety of the exercise of such power in particular cases having regard to the interests of economy, besides its legality.

  • But the Govemment Departments resent on the ground that such interference is incompatible with their responsibility for the administration.

  • In this view, the Departments are supported by academicians such as Appleby, according to whom the question of economy is inseparably connected with the efficiency of the administration and that, having no responsibility for the administration, the Comptroller and Auditor-General or his staff has no competence on the question of economy

  • Another question is whether the audit of the Comptroller and Auditor-General should be extended to industrial and commercial under- takings carried on by the Govemment through private limited companies, who are governed by the Articles of their Association, or to statutory public corporations or undertakings which are governed by statute.

  • It was rightly contended by a former Comptroller and Auditor-General that inasmuch as money is issued out of the Consolidated Fund of India to invest in these companies and corporations on behalf of the Government, the audit of such companies must necessarily be a light and responsibility of the Comptroller and Auditor-General

  • While, at present, the Comptroller and Auditor General can have no such power unless the Articles of Association of such companies or the governing statutes provide for audit by the Comptroller and Auditor-General.

  • The result is that the report of the Comptroller and Auditor-General does not include the results of the scrutiny of the accounts of these corporations and the Public-Accounts Committee or Parliament have little material for controlling these important bodies, spending public money.

  • On behalf of the Government, however, this extension of the function of the Comptroller and Auditor-General has been resisted on the ground that the Comptroller and Auditor-General lacks the business or industrial experience which is essential for examining the accounts of these enterprises and that the application of the conventional machinery of the Comptroller and Auditor-General is likely to paralyse these enterprises which are indispensable for national development.

  • As has Just been stated, this defect has been partially remedied by the Act of 1971 which enjoins the Comptroller and Auditor-General to audit and report on the receipts and expenditure of 'Government companies' and other bodies which are 'substantially financed' from the Union or State revenues, irrespective of any specific legislation in this behalf.


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 [determines ‘wisdom, 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 authority that expense has been incurred under him.

Though the constitution visualises him as a comptroller but in practice he is just the auditor general.


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 to take responsibility for his actions.

Powers and duties:

These are mentioned in the act of parliament and constitution.

1.      He 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 each state.

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 governments.

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 state revenues;

(b) Government companies; and

(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 President.

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 is there.



All private-public partnerships (PPPs), Panchayti Raj Institutions and societies getting 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 to them.

65 percent of government spending does not come under the scrutiny of the CAG

CAG needs to be a multi member body elected by a collegiums consisting of judiciary and opposition too.

CAG audits often lead to slow decision making as they create fear of persecution among bureaucrats. Also CAG mostly does post mortem work.


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