Comptroller and Auditor General of India (CAG)
Articles 148–151, the DPC Act 1971, independence, audit duties and the PAC link of the CAG, with the Accountant General's role in Chhattisgarh.
Prerequisites
- Budget in Parliament and Parliamentary Devices — the Consolidated Fund, charged expenditure and the appropriation process the CAG audits.
- Election Commission of India — compare the removal safeguards of the two bodies.
- State Government — the Governor and the Vidhan Sabha, which receive the CAG’s state audit reports.
The Hook: A Report Tabled in the Vidhan Sabha
Almost every budget session in Raipur, a thick report is tabled in the Chhattisgarh Vidhan Sabha. It may say that a district spent money from a fund on items the fund did not allow, or that a road was paid for before it was finished. Newspapers carry the headline the next day: “CAG report finds irregularities”.
The report was prepared by the Accountant General’s office in Raipur, signed under the authority of the Comptroller and Auditor General of India (भारत के नियंत्रक एवं महालेखा परीक्षक), sent to the Governor, and laid before the House. Who is this officer, why can no government remove him, and what happens after the report is tabled?
Why it matters: Prelims tests Articles 148–151, the tenure and removal rules, and “to whom does the report go”. Mains asks about the CAG’s role in financial accountability and the limits of its power.
Constitutional Provisions: Part V, Chapter V (Articles 148–151)
| Article | Provision |
|---|---|
| 148 | Appointment, oath, conditions of service, independence |
| 149 | Duties and powers, as prescribed by a law of Parliament |
| 150 | The accounts of the Union and the states are kept in the form the President prescribes on the advice of the CAG |
| 151 | Audit reports: on Union accounts to the President, who lays them before Parliament; on a state’s accounts to the Governor, who lays them before the state legislature |
The law under Article 149 is the Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971 (the DPC Act).
Appointment, Tenure and Independence
| Feature | Provision |
|---|---|
| Appointment | By the President, by warrant under his hand and seal (Art 148(1)) |
| Oath | Before the President, in the form in the Third Schedule |
| Term | 6 years or age 65, whichever is earlier (DPC Act, 1971) |
| Resignation | By writing to the President |
| Removal | Only in the same manner and on the same grounds as a Supreme Court judge: an address by both Houses, passed by a special majority, on proved misbehaviour or incapacity |
| Salary | Determined by Parliament; under the DPC Act it is equal to a Supreme Court judge |
| Protection | Salary and conditions of service cannot be varied to the CAG’s disadvantage after appointment |
| After office | Not eligible for any further office under the Government of India or any state (Art 148(4)) |
| Expenses | Administrative expenses of the office, including salaries and pensions, are charged on the Consolidated Fund of India (not voted) |
| Staff | Conditions of service of the Indian Audit and Accounts Department are prescribed by the President after consulting the CAG |
Origin: an Auditor General for India was first appointed in 1860 (Sir Edward Drummond), after the Crown took over from the East India Company. The Government of India Acts of 1919 and 1935 gave the office statutory independence. The first CAG of independent India was V. Narahari Rao (1948–54).
As of 2026: K. Sanjay Murthy is the CAG. He took oath on 21 November 2024 as the 15th CAG, succeeding Girish Chandra Murmu.
Duties and Powers (DPC Act, 1971)
What the CAG audits
| Audit of | Detail |
|---|---|
| Union and states | All expenditure from the Consolidated Fund of India, of each state, and of each Union Territory having a Legislative Assembly |
| Contingency Funds and Public Accounts | Of the Union and the states |
| Trading and manufacturing accounts | Profit and loss accounts, balance sheets and subsidiary accounts of government departments |
| Receipts | Of the Union and states, to check that rules for assessment, collection and allocation of revenue are followed |
| Bodies funded by government | Bodies substantially financed by grants or loans (Section 14: grants or loans of at least ₹25 lakh that are at least 75% of the body’s total expenditure, among other cases) |
| Government companies and corporations | Companies under the Companies Act, and statutory corporations as their laws provide |
| Other bodies | Any body on the request of the President or Governor (Section 20) |
- Financial audit — are the accounts correct and complete?
- Compliance (legal and regulatory) audit — was money spent as the law and the appropriation allowed?
- Performance audit — was it spent with economy, efficiency and effectiveness? This includes propriety audit (was the spending wise and faithful?), which is discretionary for the CAG, while compliance audit is mandatory.
Accounts versus audit
- The CAG originally kept the accounts as well as auditing them.
- In 1976, the Union government’s accounts were separated from audit (departmentalisation). The Union ministries now keep their own accounts under the Controller General of Accounts.
- For most states, the CAG’s Accountant General (Accounts and Entitlement) offices still compile the accounts, while the Accountant General (Audit) offices audit them. Both exist for Chhattisgarh, in Raipur.
The reports
The CAG traditionally submits three audit reports to the President on Union accounts:
- Audit report on appropriation accounts
- Audit report on finance accounts
- Audit report on public undertakings
The reports go to Parliament and are examined by the Public Accounts Committee (PAC). Reports on public undertakings are examined by the Committee on Public Undertakings. The CAG assists the PAC and is often called its “friend, philosopher and guide”.
In Chhattisgarh, the reports on state accounts go to the Governor and then to the Vidhan Sabha, whose own PAC examines them.
graph LR
A["Accountant General
(Audit), Raipur"] --> B["CAG of India
signs report"]
B --> C["Governor of
Chhattisgarh (Art 151(2))"]
C --> D["Laid before the
Vidhan Sabha"]
D --> E["Public Accounts
Committee examines"]
E --> F["Government's
action taken notes"]Local bodies
The CAG does not have constitutional audit power over panchayats and municipalities. Local body audit is a state subject, usually done by a state Local Fund Audit department. The CAG provides Technical Guidance and Supervision (TGS) to local body audit, an arrangement adopted after the Eleventh Finance Commission.
Analysis for Mains: Strengths and Limits
Why the CAG matters
- Completes parliamentary control of finance: Parliament votes the money, and the CAG checks how it was spent.
- Performance audits have exposed major losses and policy failures. Examples include the 2G spectrum report (2010) and the coal block allocation report (2012), both of which estimated large presumptive losses and triggered national debate.
- Independence is protected by tenure, removal procedure, charged expenses and the bar on later office.
Limits and criticisms
- Post-facto audit: the CAG looks back after money is spent. It cannot stop spending in advance, as a “comptroller” in the British sense would.
- Reports are not binding. Action depends on the PAC and the government, and PAC follow-up is often delayed.
- Secret service expenditure: the CAG cannot call for details. It accepts a certificate from the competent administrative authority.
- Presumptive-loss estimates have been criticised as speculative, and performance audits as straying into policy choices.
- Appointment is by the executive alone, with no collegium.
- Gaps in coverage: bodies such as PPP projects and some autonomous bodies fall outside regular audit.
Reforms often suggested: a collegium for appointment, timelines for PAC and government responses, statutory backing for audit of PPPs and of local bodies, and making audit reports more readable for the public.
Memory Tricks
- 148 Appoint (and independence)
- 149 Powers (by Parliament’s law)
- 150 Paper: the form of accounts
- 151 Present the report (President → Parliament; Governor → legislature)
Don’t Confuse
| This | vs | That |
|---|---|---|
| CAG (Art 148): audits Union and states | vs | Controller General of Accounts: keeps Union accounts under the Finance Ministry (since 1976) |
| Accountant General (Audit): audits the state | vs | Advocate General (Art 165): the state’s chief legal officer |
| CAG: not eligible for any further government office | vs | UPSC member: eligible to become UPSC or SPSC chairman |
| CAG: removed like an SC judge | vs | Election Commissioner: removed on the CEC’s recommendation |
| Compliance audit: mandatory | vs | Propriety audit: discretionary |
| PAC: examines CAG reports on accounts | vs | Estimates Committee: examines budget estimates, without a CAG report |
Common Mistakes
Practice
All questions below are original practice questions written in CGPSC style. They are not previous-year questions.
Level 1: Foundation
- The CAG’s duties and powers are laid down in the ______ Act, 1971.
- The CAG’s report on the accounts of Chhattisgarh is submitted to the ______.
- The first CAG of independent India was ______.
Answers
- Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971.
- Governor of Chhattisgarh, who lays it before the Vidhan Sabha.
- V. Narahari Rao.
Level 2: Prelims MCQs
Q1. Consider the following statements about the Comptroller and Auditor General of India:
- After ceasing to hold office, the CAG is not eligible for any further office under the Government of India or any state government.
- The administrative expenses of the CAG’s office are charged on the Consolidated Fund of India.
- The CAG is an ex officio member of the Public Accounts Committee of Parliament.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 1 and 2 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Answer and explanation
Q2. Match List I (Article) with List II (Subject):
| List I | List II |
|---|---|
| A. Article 148 | 1. Audit reports |
| B. Article 149 | 2. Form of accounts of the Union and the states |
| C. Article 150 | 3. Duties and powers of the CAG |
| D. Article 151 | 4. Appointment and conditions of service of the CAG |
- (a) A-4, B-3, C-2, D-1
- (b) A-4, B-2, C-3, D-1
- (c) A-3, B-4, C-1, D-2
- (d) A-1, B-3, C-2, D-4
Answer and explanation
Q3. Which one of the following is not correct about the CAG?
- (a) The CAG is appointed by the President by warrant under his hand and seal.
- (b) The CAG holds office for six years or until the age of 65, whichever is earlier.
- (c) The CAG can be removed by the President on the advice of the Union Council of Ministers.
- (d) The CAG’s salary is equal to that of a judge of the Supreme Court.
Answer and explanation
Q4. In which kind of audit does the CAG have discretion, rather than a mandatory duty?
- (a) Audit of appropriation accounts
- (b) Propriety audit
- (c) Audit of receipts
- (d) Audit of the Consolidated Fund of a state
Answer and explanation
Level 3: Mains Answer Writing
Q1. (150–200 words) “The CAG is the guardian of the public purse.” Examine the constitutional safeguards of the CAG’s independence and the limits of its role.
Model answer outline
- Intro: Articles 148–151 create the CAG to audit Union and state accounts. Ambedkar called it probably the most important office in the Constitution.
- Safeguards: removal only like an SC judge; fixed term (6 years or 65); salary equal to an SC judge and not variable to disadvantage; no further office; expenses charged on the CFI; consultation on staff conditions.
- Role: compliance, financial and performance audit; reports to President and Governors; aid to the PAC. Landmark reports (2G, coal) show the impact of performance audit.
- Limits: post-facto audit only; reports advisory; secret service expenditure; appointment by the executive alone; criticism of presumptive-loss estimates; gaps in PPP and local body audit.
- Chhattisgarh angle: AG (Audit), Raipur, reports to the Governor and Vidhan Sabha PAC on state finances and schemes such as DMF spending.
- Conclusion: Independence is well protected on paper. Effectiveness depends on timely PAC follow-up and wider audit coverage.
Q2. (60 words) Why is the CAG described as the “friend, philosopher and guide” of the Public Accounts Committee?
Model answer outline
Quick Revision Table
| Fact | Detail |
|---|---|
| Articles | 148–151 (Part V) |
| Law under Art 149 | DPC Act, 1971 |
| Appointment | President, by warrant under hand and seal |
| Term | 6 years or 65 years |
| Removal | Like an SC judge |
| After office | No further government office (Art 148(4)) |
| Expenses | Charged on the Consolidated Fund of India |
| Reports | Union: President → Parliament; State: Governor → legislature (Art 151) |
| Form of accounts | President, on the CAG’s advice (Art 150) |
| PAC link | “Friend, philosopher and guide”; not a member |
| Accounts separated from audit | Union accounts, 1976 |
| First Auditor General | Sir Edward Drummond, 1860 |
| First CAG after independence | V. Narahari Rao |
| CAG (as of 2026) | K. Sanjay Murthy, 15th CAG, since 21 November 2024 |
| Chhattisgarh | Accountant General (Audit) and AG (A&E) offices, Raipur |
Key Takeaways
- The CAG audits all expenditure from the Consolidated, Contingency and Public Account funds of the Union and states.
- Independence: SC-judge removal, fixed term, charged expenses and no further office.
- Reports go to the President (Union) or Governor (state) and are examined by the PAC.
- The CAG is an auditor, not a comptroller in practice. It cannot stop spending beforehand.
- For Mains, balance its role in accountability with the limits of post-facto, non-binding audit.
What’s Next
- UPSC and State Public Service Commissions — the bodies that recruit the civil services
- Budget in Parliament and Parliamentary Devices — the PAC and financial committees
- Public Finance — the deficits and debt that audit reports discuss
- Constitutional and Statutory Bodies — Quick Revision