Comptroller and Auditor General

Also called: CAG, Article 148 · Topic: Constitutional Bodies: UPSC, CAG, Finance Commission and Others · NCERT: Class 9, Ch 6 "Democracy"; Class 11, Ch 5 "Legislature"

Meaning

The Comptroller and Auditor General (CAG) is the constitutional officer created by Article 148. The CAG audits the accounts of the Union, the states and the bodies they fund, and reports to Parliament and the state legislatures on how public money was spent. The CAG matters because this office checks that the executive (the government of the day) spends only what the legislature has approved. That is why Dr B.R. Ambedkar called the CAG "probably the most important officer in the Constitution of India".

Explanation

Appointment, oath and term

• Appointment (Art. 148(1)): the President appoints the CAG by warrant under hand and seal, which is a formal order the President signs and seals.
• In practice, the Union Cabinet chooses the person.

• There is no selection committee.

• Oath (Art. 148(2), Third Schedule): the CAG takes the oath before the President, or before a person the President appoints for this purpose. The CAG swears to:

• bear true faith in the Constitution;
• uphold India's sovereignty and integrity;
• do the job without fear or favour;

• uphold the Constitution and the laws.

• Term: the CAG serves 6 years from taking charge, or until age 65, whichever comes first. This rule comes from Section 4 of the CAG (Duties, Powers and Conditions of Service) Act 1971, not from the Constitution [5].

• Resignation: the CAG resigns in writing, addressed to the President (Art. 148(1)).

Removal: the same procedure as a Supreme Court judge

Under Art. 148(1), the CAG can be removed only in the way a Supreme Court judge is removed (Art. 124(4)).

1. Ground: proved misbehaviour or incapacity. No other ground is allowed.

2. Address in each House: Lok Sabha and Rajya Sabha must each pass an address (a formal request to the President) in the same session. Each House needs a special majority: - a majority of the House's total membership, and - two-thirds of the members present and voting.

3. President's order: once both Houses have presented the address, the President orders the removal.

Safeguards of independence

• Salary (148(3)): Parliament fixes the CAG's salary and service conditions by law. Under s.3 of the 1971 Act, the salary equals a Supreme Court judge's salary.

• After appointment, salary, leave, pension and retirement age cannot be changed to the CAG's disadvantage.

• No job after office (148(4)): a former CAG cannot hold any further office under the Union or any state.

• This removes any reason to please the government in the hope of a post later.

• Charged expenditure (148(6)): the salaries, allowances and pensions of the CAG's office are charged on the Consolidated Fund of India. The Consolidated Fund is the main government account: all revenue goes into it, and all lawful spending comes out of it.

• Parliament may discuss this spending, but it does not vote on it.

• Audit staff (148(5)): the President sets the service conditions of the Indian Audit and Accounts Department (IA&AD), the CAG's staff, after consulting the CAG.

Limits: a "Comptroller" only in name

• No control over the release of money: in the strict sense, a "comptroller" also controls when money is released. India's CAG does not do this.
• In the UK, the C&AG must approve withdrawals from the Exchequer before the money is released.

• In India, departments draw money without the CAG's approval. The CAG checks the spending only after it happens. This is called post-audit.

• Not an officer of the legislature: the UK C&AG is an officer of the House of Commons. India's CAG is an independent constitutional authority who reports through the President or Governor.

• Single-person office: the CAG is one officer, not a multi-member board.
• No deadline for laying reports: the Constitution sets no time limit for the President or Governor to place audit reports before the legislature.

In the Constitution and practice

• Articles in the Constitution:
• Art. 148: creates the office and sets out its safeguards.
• Art. 149: sets out the CAG's duties and powers, as Parliament prescribes by law.
• Art. 150: the President prescribes the form of accounts of the Union and the states on the CAG's advice.
• Art. 151: audit reports on the Union go to the President, who has them laid before each House of Parliament. Reports on a state go to the Governor, who has them laid before the state legislature.
• Art. 279: the CAG works out and certifies the "net proceeds" of a tax or duty (the tax collected minus the cost of collecting it). The CAG's certificate is final. This matters because net proceeds decide how tax money is shared between the Union and the states.

• Third Schedule: contains the form of the CAG's oath.

• The CAG (DPC) Act 1971: the law Parliament made under Article 149.

• s.3: salary and service conditions.
• s.4: term of office [5].
• s.10: the CAG compiles the accounts of the Union and the states. A proviso (an exception clause) lets the President relieve the CAG of this work.
• s.11: the CAG prepares annual accounts for the President or Governor.

• s.12: the CAG gives information and help to governments.

• Who uses the reports: the Public Accounts Committee (PAC), the parliamentary committee that checks government spending, examines the CAG's reports. This is why the CAG is called the "friend, philosopher and guide" of the PAC.

• History of the office:
• 1858: the British Crown takes over India from the East India Company. The office traces its beginnings to this year [2].
• 16 November 1860: the first Auditor General, Sir Edmund Drummond, is appointed by executive order [3]. Some texts call him Sir Edward Drummond.
• 1862: the Departments of Accounts and Audit are reorganised [2].
• 1884: the title "Comptroller and Auditor General of India" is used for the first time [2].
• GoI Act 1919: the Auditor General gets statutory recognition, meaning the post is set out in a law [2].
• GoI Act 1935: he becomes the "Auditor General of India", appointed by the King. His appointment and service conditions are fixed in the Act, which strengthens his independence [2].
• 26 January 1950: the office becomes Article 148.

• Audit Diwas: India marks 16 November every year as Audit Diwas, the anniversary of the 1860 appointment [3].

• Separation of accounts from audit (1976): keeping the Union's accounts was taken away from the CAG, so the CAG now only audits them. 1. MPs asked for "departmentalisation" of accounts, meaning each ministry keeps its own books [6]. 2. A Group of Ministers recommended the change in August 1973. The Cabinet Committee on Administration approved it in June 1975 [6]. 3. The CAG (DPC) Amendment Act 1976 gave effect to the change. In 1976, the President used the proviso to s.10 to relieve the CAG of compiling the Union's accounts [6]. 4. Accounting work, along with the officers and staff, moved to the ministries [6]. Union ministries now keep their accounts under the Controller General of Accounts (CGA) in the Ministry of Finance.

• Current CAG: K. Sanjay Murthy took the oath before the President on 21 November 2024 at Rashtrapati Bhavan [4].

Don't confuse with

• Controller General of Accounts (CGA): the CGA works in the Ministry of Finance and keeps the Union ministries' accounts (since 1976). The CAG audits those accounts and is an independent constitutional authority.
• UK Comptroller and Auditor General: the UK officer controls the release of money from the Exchequer and is an officer of the House of Commons. India's CAG does only post-audit and reports through the President or Governor.
• Supreme Court judge: the removal procedure is the same for both. But a judge serves until age 65 (Art. 124(2)), while the CAG serves 6 years or until 65 under the 1971 Act. After office, a judge cannot practise in any court in India (124(7)) but may take government posts. A former CAG can take no office under the Union or any state (148(4)).
• CVC, CIC and Lokpal: each of these is chosen by a selection committee that includes the Leader of Opposition. The CAG is chosen by the executive alone.

Prelims Hooks

• Art. 148: the President appoints the CAG by warrant under hand and seal. The CAG is removed like a Supreme Court judge (Art. 124(4)), by a special majority in both Houses on the grounds of proved misbehaviour or incapacity.
• Term trap: "6 years or age 65, whichever is earlier" comes from s.4 of the CAG (DPC) Act 1971, not from the Constitution [5].
• Oath trap (Third Schedule): the CAG swears to "uphold the Constitution and the laws". This phrase is not in a Union minister's oath.
• Match the articles: Art. 150 → form of accounts, set by the President on the CAG's advice. Art. 151 → reports go to the President or Governor, who has them laid before the legislature. Art. 279 → the CAG's certificate of "net proceeds" is final.
• 148(6): the CAG's office expenses are charged on the Consolidated Fund of India, so Parliament does not vote on them. 148(4): no further office under the Union or any state after leaving office.
• Dates: 1860 → first Auditor General, Sir Edmund Drummond, and 16 November is Audit Diwas [3]. 1884 → the CAG title is first used [2]. 1919 → statutory recognition [2]. 1976 → accounts separated from audit [6]. False statement: "India's CAG controls the release of funds from the Consolidated Fund." That describes the UK model.

Mains Points

• Strong guarantees, but a weak selection process.
• The CAG has judge-style removal, a protected salary, charged expenses and no jobs after office.
• But the executive alone picks the CAG, and the CAG then audits that same executive.

• Reform idea: a selection committee that includes the Leader of Opposition, like the ones for the CVC, CIC and Lokpal.

• An auditor whose reports can be ignored.

• There is no deadline for laying reports before the legislature, and the PAC takes up only a few of them.
• Follow-up depends on the executive's political will.

• Reform ideas: a time limit set by law for tabling reports, and an "action taken" report within a fixed period. A multi-member audit board could also be considered: it would reduce the risk of one person's bias and add expertise in performance, IT and environmental audit, though a single CAG keeps responsibility clear.

• Finishing the 1976 reform.

• Separating accounts from audit made the CAG more independent, because an auditor no longer checks books its own office prepared [6].
• Fully separating accounts from audit in the states, and giving the IA&AD more freedom from the executive (the President now sets its service conditions under 148(5)), would complete this reform.

Related concepts

• CAG (Duties, Powers and Conditions of Service) Act 1971
• Separation of accounts from audit

Read more

• The Comptroller and Auditor General: office and independence