In India, other than ensuring that public funds are used efficiently and for their intended purpose, what is the importance of the office of the Comptroller and Auditor General (CAG)?

1. CAG exercises exchequer control on behalf of the Parliament when the President of India declares a national emergency/financial emergency.

2. CAG reports on the execution of projects or programs by the ministers are discussed by the Public Accounts Committee.

3. Information from CAG reports can be used by investigating agencies to press charges against those who have violated the law while managing public finances.

4. While dealing with the audit and accounting of government companies, CAG has certain judicial powers for prosecuting those who violate the law.

Which of the statements given above is/are correct?              

The correct answer is 2 and 3 only.

Key Points

Comptroller and Auditor General of India-

• During the Financial Proclamation is in operation, the executive authority of the Union shall extend to the giving of directions to any State to observe such canons of financial propriety as may be specified in the directions, and to the giving of such other directions as the President may deem necessary and adequate for the purpose. Hence statement 1 is not correct.
• While dealing with the audit and accounting of government companies, CAG does not have certain judicial powers for prosecuting those who violate the law. CAG is only an advisory body and has some quasi-judicial powers. Hence statement 4 is not correct.
• The Public Account Committee carries out the examination of the Appropriation Accounts relating to the Railways, Defence Services, P&T Department and other Civil Ministries of the Government of India and Reports of the Comptroller and Auditor-General of India thereon as also the Reports of the Comptroller and Auditor-General on Revenue Receipts mainly form the basis of the deliberation of the Committee.
  • The Comptroller and Auditor General is the “friend, philosopher and guide” of the Committee.
  • Hence statement 2 is correct.
  • Information from CAG reports can be used by investigating agencies to press charges against those who have violated the law while managing public finances. Hence statement 3 is correct.

Important Points

• The Comptroller and Auditor General of India (CAG) is mentioned in the Constitution of India under Article 148 to 151 under Part V.
• He is the head of the Indian Audit and Accounts Department.
• He is the guardian of the public purse and controls the entire financial system of the country at both the centre and state levels.
• His duty is to uphold the Constitution of India and the laws of Parliament in the field of financial administration.
• The CAG is appointed by the President of India by a warrant under his hand and seal.
• He holds office for a period of six years or up to the age of 65 years, whichever is earlier.​
• He submits 3 audit reports to the President.
  • Audit report on appropriation accounts.
  • Audit report on financial accounts.
  • Audit report on public undertakings.