Why in the News?
The Comptroller and Auditor General of India’s (CAG) audit has flagged ₹573 Crore irregularities in Indian Railways.
About Comptroller and Auditor General (CAG) of India:
- Foundation: Established under Article 148 of the Constitution of India.
- Independence: A constitutional authority, not subject to executive control.
- Appointment: Appointed by the President of India.
- Tenure: Holds office for 6 years or until the age of 65 years, whichever is earlier.
- Removal: Can be removed by the President in the same manner and on the same grounds as a judge of the Supreme Court of India.
- Post-Retirement Bar: Ineligible for further office under the Government of India or any State after demitting office.
- Funding: Administrative expenses are charged upon the Consolidated Fund of India, ensuring financial autonomy.
- Parliamentary Independence: No minister can represent the CAG in Parliament.
- Role: Known as the guardian of the public purse and a key pillar of Indian democracy.
Powers and Functions:
- Audits:
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- Fund Audits: Audits expenditures from the Consolidated Fund of India, State Consolidated Funds, and Union Territory funds.
- Other Fund Audits: Audits Contingency Fund and Public Account at both Central and State levels.
- Departmental Audits: Reviews profit and loss accounts, balance sheets, and subsidiary accounts of government departments.
- Authority Audits: Audits bodies and authorities substantially financed by the government.
- Company Audits: Examines accounts of government-owned companies and corporations.
- Special Audits: Audits other authorities when requested by the President or Governor.
- Parliamentary Role: Acts as a guide, friend, and philosopher to the Public Accounts Committee of Parliament.
- Public Accountability: Exposed major scams such as the 2G spectrum and coal block allocation cases.
- Sectoral Reviews: Highlighted inefficiencies in defence, railways, and other public enterprises.
Issues with the Comptroller and Auditor General:
- Lack of Real-Time Control: Cannot stop or approve withdrawals from the Consolidated Fund; cheques can be issued without CAG’s prior clearance.
- Opaque Appointment: No prescribed qualifications or transparent procedure for selection; appointment is entirely executive-controlled.
- Limited Audit Scope:
- Excludes certain public entities like Life Insurance Corporation and public sector banks.
- Cannot audit public-private partnerships and funds like Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund and Prime Minister’s National Relief Fund.
- Off-budget borrowings (e.g., through National Investment and Infrastructure Fund) remain outside audit scope.
- Post-Facto Nature: Audits occur after expenditure, limiting preventive or real-time oversight.
| [UPSC 2012] In India, other than ensuring that public funds are used efficiently and for 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 national emergency/financial emergency. 2. CAG reports on the execution of projects or programmes by the ministries 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? Options: (a) 1, 3 and 4 only (b) 2 only (c) 2 and 3 only* (d) 1, 2, 3 and 4 |
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