Comptroller and Auditor-General of India

Table of contents

Context (TH): CAG of India assumes chairmanship of the Asian Organisation of Supreme Audit Institutions for 2024-2027.

About CAG

Comptroller and Auditor-General heads the Indian Audit and Accounts Department.
He/she is the guardian of the public purse of the Union of India (the Centre and the states).

Appointed by the President by warrant under his/her hand and seal.
Holds office for a period of six years or up to the age of 65 years, whichever is earlier.
The IC does not provide for the eligibility of CAG for reappointment to the same office.

CAG does not hold his office at the pleasure of the President. The IC prescribes his/her terms of office and removal.
The removal of CAG involves a procedure similar to the removal of a Supreme Court Judge.
That is, the President can remove CAG based on a resolution passed by both Houses of Parliament with a special majority, either on proven misbehaviour or incapacity.

Article 148 provides for an independent office of Comptroller and Auditor General of India.

Shall audit the accounts of the Union of India and any other authority or body as may be prescribed by any law made by Parliament.

Audit reports submitted by the CAG to the President (which are later tabled in the legislature):
1. Appropriation audit report
2. Financial account audit report
3. Public sector undertaking audit report
Parliament’s Public Accounts Committee (PAC) examines the three CAG reports.
It acts as a guide to the Parliament’s Public Accounts Committee.

The President, with advice from the CAG, decides how the accounts should be maintained.

CAG’s reports on Union accounts go to the President, who then shares them with the Parliament.
CAG’s reports on State accounts are sent to the State Governor, who then shares them with the State Legislature.

Calculation of “net proceeds” is ascertained and certified by CAG, whose certificate is final.

Its administrative expenses are charged to the Consolidated Fund of India (not subject to the vote of Parliament).
CAG is provided with the security of tenure.
CAG is not eligible for further office under GoI or the Government of any State after his term.
His/her salary is equal to that of a judge of the Supreme Court.
The Parliament determines his/her salary and other service conditions.
His/her rights regarding leave of absence, pension, etc., can not be altered to his/her disadvantage.
No minister can represent the CAG in Parliament (both Houses).
No minister can be called upon to take any responsibility for any actions done by the office of CAG.

The Cabinet Secretary (functions directly under the PM) prepares a shortlist.
The PM recommends one name from that list to the President.
If the President approves the same, the appointment of the CAG is made.
There are no specific laid down eligibility criteria or qualifications for shortlisting or selection.

Indian Audit and Accounts Service is a Central Group ‘A’ service recruited by the UPSC.
The other staff of CAG are also appointed by the executive.

The entire selection process proves a clear case of conflict of interest, and hence is neither truly independent nor the guardian of the public purse in its true spirit.

If free and fair elections are the backbone of a democracy, an independent audit system is crucial for a country’s financial hygiene.
Hence the appointment of the CAG can be on similar lines to the appointment of CEC and ECs.
India can also take inspiration from the appointment process of CAG in the UK and CG in the US.

The President will appoint the Chief Election Commissioner (CEC) and Elections Commissioners (ECs) on the advice of a committee consisting of:
- The Prime Minister (PM),
- The Leader of the Opposition (LoP) in the Lok Sabha, and
- The Chief Justice of India (CJI)

The National Audit Office is the top auditor of the United Kingdom (UK).
The PM and the chairman of the Public Accounts Committee make the selection, which the House of Commons must ratify.
In the UK, no money can be drawn from the public exchequer without the approval of the NAO. (In India, the CAG audits the accounts ex post facto (after the expenditure is done))
CAG (leader of NAO) in the UK is a member of the House of Commons.

In the US, the Comptroller General (CG) heads the GAO.
Congress establishes a commission recommending individuals for the post of CG to the President.
The President appoints the CG with the advice and consent of the Senate.

Former CAG Vinod Rai was the 11th CAG of India from 2008 to 2013.
He exposed various alleged scams and irregularities in the public sector, such as 2G spectrum allocation, coal block allocation, Commonwealth Games, etc. (No one was convicted!)

Expand the coverage of CAG to include all entities that receive public funds or provide public goods, such as PRIs and govt-funded societies.
PPPs are a popular medium for the execution of infrastructure projects worth millions of rupees, but they are not currently audited by the CAG that is no independent oversight of these projects.
Introduce a Collegium-type mechanism to appoint a new CAG, similar to how the CVC is chosen, to ensure independence and impartiality.

In 2011, a 2G spectrum allocation scam allegedly caused a loss of Rs. 1.76 lakh crore to the exchequer. It involved the government’s allocation of 2G spectrum licenses at below-market rates to a select few companies, leading to huge windfall gains for them.
In 2013, a coal block allocation scam allegedly caused a loss of Rs. 1.86 lakh crore to the exchequer. Allocation of coal blocks to private companies without following due process leads to huge windfall gains for them.
In 2017, the Rafale fighter jet deal had been allegedly overpriced by Rs. 36,000 crore. The government purchased 36 Rafale fighter jets from France at a cost of Rs. 59,000 crore, which was much higher than the price quoted by other countries.