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Subject: Comptroller and Auditor General CAG

  • “The duty of the Comptroller and Auditor General is not merely to ensure the legality of expenditure but also its propriety.” Comment.

    The Comptroller and Auditor General of India (CAG), established under Article 148 of the Constitution, is the guardian of the public purse.
    While legality focuses on whether expenditure is made according to law, propriety examines whether such expenditure is justified, prudent, and in the public interest.

    Ensuring Legality of Expenditure

    Ensures all expenditures are authorized by Parliament or State Legislature through Appropriation Acts.

    Verifies that funds are drawn from the Consolidated Fund only under proper sanction.

    Checks compliance with financial rules, codes, and delegated authorities.

    Prevents unauthorized re-appropriation or excess expenditure beyond approved limits.

    Eg- CAG’s audit of defence expenditure.

    Ensuring Propriety of Expenditure

    Examines whether expenditure is necessary, justifiable, and in the public interest – Ensures Responsible Use of Public Funds

    Prevents Misuse – Evaluates waste, extravagance, or favouritism even if legally permissible.

    Strengthens spirit of financial responsibility – Questions whether spending ensures value for money and meets ethical standards of governance.

    Promotes a culture of fiscal morality and prudence in the use of public funds.

    Strengthens Parliamentary Control and oversight with insights on ethical and prudent financial management

    Examples of Propriety Concerns Highlighted by CAG

    2G Spectrum Allocation (2010)

    Commonwealth Games (2010)

    Coal Block Allocations (2012)- Identified procedural irregularities and favoritism

    “The CAG is the conscience-keeper of public finance, ensuring not only lawful but also wise spending.” – 2nd ARC

  • 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)

    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?