Parliament authorises money to be spent. Someone must check whether the money was actually spent for the purposes Parliament authorised. That someone is the Comptroller and Auditor General of India — the constitutional auditor of all government finances. The CAG's position is established by Articles 148-151 of the Constitution. The framers gave the CAG status equal to a Supreme Court judge, a long fixed tenure, and protection against executive interference — because the CAG's role is to scrutinise the executive on behalf of Parliament. Dr. Ambedkar called the CAG "the most important officer under the Constitution of India." The 2013 Prelims tested the relationship between the CAG's reports and the Public Accounts Committee. The 2014 Prelims tested the largest committee of Parliament. Hold the architecture, the limits, and the case law.
Article 148 — appointment, removal, conditions
Article 148(1) provides: "There shall be a Comptroller and Auditor-General of India who shall be appointed by the President by warrant under his hand and seal and shall only be removed from office in like manner and on the like grounds as a Judge of the Supreme Court."
Appointment: By the President. The Constitution does not specify qualifications or procedure beyond Presidential warrant. In practice, the CAG is typically a senior IAS officer — though the Constitution does not require this.
Removal: Same procedure as a Supreme Court judge. Article 124(4) — by the President on an address by each House of Parliament supported by a majority of total membership and two-thirds of those present and voting, on grounds of "proved misbehaviour or incapacity." This identical procedure ensures that the CAG cannot be removed at the executive's will — only through a parliamentary super-majority on substantive grounds.
Article 148(2) — Oath of office prescribed. The CAG takes oath before assuming office.
Article 148(3) — Salary and other conditions of service. Determined by Act of Parliament. Currently, the CAG receives salary equal to a Supreme Court judge under the Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act 1971. Important protection: "neither his salary nor his rights in respect of leave of absence, pension or age of retirement shall be varied to his disadvantage after his appointment." This means Parliament cannot reduce the CAG's salary or benefits during their tenure.
Article 148(4) — post-tenure restriction. The CAG "shall not be eligible for further office either under the Government of India or under the Government of any State after he has ceased to hold his office." This is a post-tenure ban — preventing the CAG from being rewarded with a government position after retirement, which could create incentives for favourable audit during tenure.
Article 148(5) — Rules for the Indian Audit and Accounts Department service. Made by the President after consultation with the CAG, subject to Parliamentary law.
Article 148(6) — Administrative expenses of the CAG's office, including all salaries and pensions, are charged on the Consolidated Fund of India. This means the expenses are not subject to Parliamentary vote — they must be paid out automatically. This protects the CAG's office from financial pressure.
Tenure (under the 1971 Act) — six years from the date of appointment, or until age 65, whichever is earlier.
Articles 149-150 — duties and accounting
Article 149 provides: "The Comptroller and Auditor-General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States as were conferred on or exercisable by the Auditor-General of India immediately before the commencement of this Constitution."
The Constitution does not specify the CAG's duties — it leaves them to Parliament. Parliament has done so through the Comptroller and Auditor General (Duties, Powers and Conditions of Service) Act 1971. The Act prescribes two types of functions:
One — Accountant function. The CAG compiles the accounts of the Union and the States. (For the Centre, this function has gradually been transferred to specialised agencies; for the States, it remains with the CAG.) The accounts are kept in such form as the President prescribes on the CAG's advice.
Two — Auditor function. The CAG audits all the receipts and expenditure of the Union and State Governments. The audit ascertains:
(i) Whether moneys disbursed were legally available for, and applicable to, the service or purpose to which they have been applied.
(ii) Whether the expenditure conforms to the authority which governs it.
(iii) Whether the disbursements are sanctioned by the proper authority.
The audit covers: (a) Government receipts and expenditure; (b) accounts of Government corporations and PSUs; (c) accounts of bodies and authorities substantially financed from Consolidated Fund; (d) accounts of stores and stocks; (e) grants in aid given to bodies and institutions.
Article 150 provides: "The accounts of the Union and of the States shall be kept in such form as the President may, on the advice of the Comptroller and Auditor-General of India, prescribe."
This gives the CAG a constitutionally-rooted advisory role on the FORM of accounts. The President prescribes the format; but the President must act on the CAG's advice. This ensures uniformity and integrity in government accounting.
Article 151 — submission of reports
Article 151(1) provides: "The reports of the Comptroller and Auditor-General of India relating to the accounts of the Union shall be submitted to the President, who shall cause them to be laid before each House of Parliament."
Article 151(2) provides similarly for State accounts: reports to the Governor of the State, laid before the State Legislature.
The reports are not directly published by the CAG — they go through the President (or Governor) to Parliament (or State Legislature). The legal architecture treats the CAG as Parliament's auditor, with the executive head as the conduit.
Three categories of CAG reports:
(i) Audit Report on Appropriation Accounts — examines whether moneys appropriated by Parliament have been spent for the authorised purposes within the authorised amounts.
(ii) Audit Report on Finance Accounts — examines the receipts and disbursements during the year, including details of revenue, capital expenditure, public debt, etc.
(iii) Audit Report on Public Sector Undertakings — examines the accounts and financial performance of Central PSUs.
Plus thematic and performance audit reports on specific areas — defence, telecommunications, environment, social sector schemes, infrastructure projects, etc.
Once laid before Parliament, the reports are referred to the appropriate parliamentary committee — typically the Public Accounts Committee for general financial reports, the Committee on Public Undertakings for PSU reports, and the Estimates Committee for performance reports. The committees examine the reports, take evidence from officials, and make recommendations to Parliament.
The CAG's reports do not have direct legal force. They are advisory and informative. But they carry substantial weight politically — they expose financial irregularities, performance failures, and policy implementation problems. Some of the most consequential CAG reports in Indian history (2G spectrum, coal allocation, Commonwealth Games) have led to major political controversies.
The 2013 Prelims — Public Accounts Committee
The 2013 Prelims tested the relationship between the Public Accounts Committee and the CAG's reports.
- consists of not more than 25 Members of the Lok Sabha
- scrutinizes appropriation and finance accounts of Government
- examines the report of the Comptroller and Auditor General of India
The Public Accounts Committee (PAC):
(i) Total membership: 22 (15 Lok Sabha + 7 Rajya Sabha). Elected annually.
(ii) Members elected by the principle of proportional representation by single transferable vote.
(iii) Chairperson is appointed by the Speaker. By convention, the Chairperson is from the Opposition (since 1967).
(iv) A Minister cannot be a member.
The PAC's functions:
(i) Examines accounts showing the appropriations of sums granted by Parliament.
(ii) Examines accounts of state corporations, trading and manufacturing schemes, and other accounts.
(iii) Examines the Finance Accounts of the Government.
(iv) Examines reports of the CAG on appropriation accounts, finance accounts, and other matters.
(v) Examines accounts of any autonomous body whose accounts are audited by the CAG.
The PAC functions on the CAG reports. The CAG does the audit; the PAC examines the audit; both work together as a check on the executive's financial conduct.
The 2014 Prelims — Estimates Committee
The 2014 Prelims tested the largest financial committee of Parliament.
Three financial committees of Parliament:
Estimates Committee — 30 members, all Lok Sabha. Created by Lok Sabha Rules. Examines estimates of expenditure, suggests economy and efficiency in administration. Sometimes called "the continuous economy committee." Cannot consider matters that are sub judice.
Public Accounts Committee (PAC) — 22 members (15 LS + 7 RS). Examines audit reports of CAG; scrutinises appropriation and finance accounts.
Committee on Public Undertakings (COPU) — 22 members (15 LS + 7 RS). Examines reports of CAG on Public Sector Undertakings; scrutinises PSU functioning.
The three committees have complementary roles. The Estimates Committee operates ex ante (before money is spent) — examining estimates and suggesting economies. The PAC and COPU operate ex post (after money is spent) — examining audit reports and findings.
Role and significance — Ambedkar's words
Dr. B.R. Ambedkar called the CAG "the most important officer under the Constitution of India" and "next only to the judiciary in importance." His reasoning:
(i) The CAG's role is to ensure that the executive does not spend money illegally or extravagantly — making parliamentary control over finance real.
(ii) The CAG's independence is essential because the auditor must be free of pressure from the audited.
(iii) The CAG's reports are the basis on which Parliament can hold the executive accountable for financial conduct.
The constitutional architecture protects this independence:
(i) Removal procedure equivalent to a Supreme Court judge — Article 148(1).
(ii) Salary and conditions of service cannot be adversely varied during tenure — Article 148(3).
(iii) Administrative expenses charged on the Consolidated Fund — Article 148(6) — beyond Parliamentary vote.
(iv) Post-tenure ban on government appointment — Article 148(4) — preventing post-retirement rewards.
(v) Reports go to Parliament/Legislature, not to the executive — Article 151 — making the CAG accountable to Parliament, not to the government.
The CAG's actual role has been somewhat constrained compared to the British counterpart. In Britain, the CAG has BOTH "Comptroller" function (controlling issue of money out of the Consolidated Fund — pre-expenditure control) AND "Auditor" function (post-expenditure audit). The Indian CAG has only the audit function — pre-expenditure control rests with the Ministry of Finance.
Critics have noted this limitation. The Indian CAG can point out irregularities only after they have occurred — not prevent them. Reform proposals have suggested giving the Indian CAG additional Comptroller powers similar to Britain. None has been implemented.
Another limitation: the combination of accounts and audit functions in the Indian system. In most countries, accounting is an executive function (kept by the audited entity); auditing is independent. In India, the CAG historically did both — creating a kind of conflict of interest. The position is being reformed; for the Centre, accounts are gradually being separated.
What students must hold
Six points carry the weight. One, Article 148 — appointment by the President. Removal procedure same as Supreme Court judge (address by both Houses with majority of total membership and two-thirds of those present and voting). Salary cannot be adversely varied during tenure.
Two, tenure under CAG Act 1971: six years or age 65, whichever earlier. Salary equal to a Supreme Court judge.
Three, Article 148(4) — post-tenure ban on further government office. Article 148(6) — administrative expenses charged on Consolidated Fund (beyond Parliamentary vote).
Four, Articles 149-150 — duties prescribed by Parliament (CAG Act 1971). Two functions: Accountant (compiles accounts) and Auditor (audits receipts and expenditure). Article 150 — accounts kept in form prescribed by President on CAG's advice.
Five, Article 151 — reports to the President for Union accounts (laid before Parliament) and to the Governor for State accounts (laid before State Legislature). Three main reports: Appropriation Accounts; Finance Accounts; Public Sector Undertakings.
Six, Public Accounts Committee — 22 members (15 LS + 7 RS). Chairperson typically from Opposition. Examines CAG reports. The 2013 Prelims tested PAC composition (correct: 22 members from both Houses, NOT 25 LS members). The 2014 Prelims tested that the Estimates Committee (30 members LS only) is the largest. For more, see parliamentary control over executive and Budget and FRBM.