CAG is established under Article 148 of the Constitution as the supreme audit authority of India. Ambedkar called it as most important officer under the Constitution of India
Importance of the office of CAG
Guardian of Public Purse – CAG ensures all government expenditure is sanctioned by law and used appropriately.
Bulwark of Democracy along with ECI and SC
Promotes Accountability – Eg: 2G Spectrum scam (2010)
Strengthens Parliamentary Oversight – CAG reports form the basis for examination by Public Accounts Committee (PAC) and COPU.
Ensures Financial Propriety – Audits whether expenditure follows financial rules, principles, and economy norms.
Auditor of Federal Finances – Audits accounts of both Union and State Governments under Articles 149-151.
Promotes Good Governance – Performance audits drive improvements in scheme design, implementation, and outcomes.
Reflection of importance in method and terms of appointment
Appointed by the President of India under Article 148(1) by warrant under his hand and seal.
Oath of Office under Third Schedule to uphold the Constitution. The oath symbolises the solemn responsibility and independence of the office.
Fixed Tenure – CAG holds office for 6 years or until age 65, whichever is earlier (Section 3, CAG Act 1971). Fixed tenure shields from executive pressure and ensures continuity.
Removal Same as Supreme Court Judge- This stringent removal procedure protects CAG from arbitrary action by executive.
Salary Charged on Consolidated Fund, not voted by Parliament (Article 148(3)).
Service conditions cannot be varied to CAG’s disadvantage during tenure (Article 148(4)).
No Eligibility for Further Government Office
Reflection of importance in powers vested
Comprehensive audit authority across federal levels. – CAG audits all expenditure from Consolidated Fund of India, Consolidated Funds of States, and UTs with legislatures.
Audit of Contingency Fund and Public Account – Ensures complete coverage of government finances.
Audit of Public Sector Undertakings- Eg: Audits LIC, ONGC, FCI, BHEL, Indian Railways under Companies Act provisions.
Audit of Autonomous Bodies substantially financed by governmentEg: ICAR, CSIR
Performance Audit evaluating economy, efficiency, effectiveness of schemes. Eg: Performance audits on MGNREGA, NHM, PMAY, Swachh Bharat Mission.
CAG Standardises government accounting practices by prescribing form in which accounts of Union and States shall be maintained (Article 150).
Independent Investigation Powers – CAG can call for any document, information, books, accounts from any government office without restriction.
Discretionary Powers – Section 23, CAG (DPC) Act 1971 allows CAG to issue directions on accounting and audit principles.
“The CAG is the conscience-keeper of public finance, ensuring not only lawful but also wise spending.” – 2nd ARC