intro/conc
- guardian of public purse
- upholds constitution and laws in field of financial administration
- one of the bulwarks of democratic system
Article 148 - 151
Duties
- audits expenditure from CFI & state CF
- audits contingency fund, public accounts
- audits trading, manufacturing, profit, loss, balance sheets
- all txn of central & state govt related to debt, sinking fund, deposit, advances, suspense acct. remittance etc
- any other authority when requested by Prez/Governor
Roles
Legality of expenditure
- constitutional audits of CFI
- annual reports on financial regularity
- compliance check to legal frameworks eg. GST audit
- financial oversigh, detects financial mismanagement eg. CWG
- Parliamentary accountability - report examined by PAC eg. 2G
Propriety of expenditure
- performance auditing
- economy, efficiency, effectiveness
- outcome, impact
- review policy implementation & achievement of objectives
- value of money audit - assess scheme efficiency eg. Clean ganga audit
- Transparency eg. DMRC audit
- advisory role: provides fiscal advice
- Public interest protection - PSU effiiciency eg. Air India Audit
- Global standards: adheres to intl. audit norms
- eg.
- 2G Spectrum Case 2010
- Coal Black Allocation 2012
- CWG Scam 2010
- accountability mechanism
- report examined by PAC
Role of CAG in PAC
- PAC examines report of CAG
- CAG helps PAC ensure checks & balances
- ensuring accountability of govt
- CAG as guide, friend, philosopher of PAC
- CAG suggests correction action to PAC
- CAG is interpretor & translator, explaining officials’ views to politicians & vice versa
-
- listing urgent matters before PAC
Comparison with Britain
| India | Britain |
|---|---|
| only auditor, not comtroller | both auditor & comptroller |
| audits accounts after expenditure (ex post facto) | no money withdrawn before approval of CAG |
| not member of parliament | member of house of commons |
Challenges & issues
- limitation on secret service expenditure
- limited powers for seeking information
- lack of clarity on audit of PSE, DISCOMS, PPP projects
- single person to multi member chair
- delays & reductions in CAG reports in past years
- 2015: 55
- 2020: 14
- conflict of interest related to appointment
- CAG appointed from IAS instead of IA&AS
Reforms
- ensuring independence not just in spirit but in practice
- transparency in appointment
- curbing delays in getting info
- power of enforcing order + punitive powers + time bound implementation
- Vinod Rai (former CAG)
- bring PPP, PRI, govt funded soc under CAG abmit
- amend CAG Act 1971 to keep pace with changes in governance
- collegium type mechanism to choose new CAG on lines of CVC
- CAG should audit implementation of SDG, GST etc
Ensuring independence
- service conditions: parliament determined, immutable post appointment
- expenses charged on CFI
- tenure: 6yr/65yr
- admin powers prescribed by President
- Post retirement ineligible for further office
- removal same as SC judge
- ministers cannot represent CAG
Recent findings
- banking & taxation: Rs.74KCr tax irregularities by banks / NBFC
- MGNREGA: 14KCr spent but works incomplete (Maha)
- Road project: 297Cr wasted due to faulty DPR, weak planning (Maha)
- Pollution control: 1400 units lacked approval
- Transport: Gujarat RTO - faulty sensors, manual tests
- MGNREGA (Uttarakhand): 157 days wage delays
- Ecological Governance - J&K: disappearance of nearly half lakes since 1967
- Power schemes (UP) - DDUGJY, SAUBHAGYA - financial mismanagement, poor implementation