The Supreme Court has agreed to examine a plea challenging the Centre’s exclusive authority to appoint the Comptroller and Auditor General of India (CAG).
Petitioner’s Argument
- Filed by: Advocate Prashant Bhushan and the Centre for Public Interest Litigation (CPIL).
- The petition argues that absolute control of the Executive over the CAG’s appointment affects its independence.
- Demand: Appointment of the CAG through a non-partisan selection committee consisting of:
- Prime Minister
- Leader of Opposition
- Chief Justice of India
- Concerns raised:
- Pause in Maharashtra audits.
- Decline in Union government audits.
- Shelving of performance audit on ‘debt sustainability.’
- Allegations of corruption in recruitment within the CAG.
Supreme Court’s Response
- Issued Notice: Justice Surya Kant sought the Union Government’s response.
- Court’s Concern: Whether judicial intervention would amount to rewriting Article 148.
About Comptroller and Auditor General of India
Constitutional Provisions
- Article 148:
- The CAG is appointed by the President under his hand and seal.
- Removal is on the same grounds and manner as a Supreme Court judge.
- Salary and service conditions are determined by Parliament.
- Not eligible for further office under the Central or State government.
- Expenses of the CAG’s office are charged upon the Consolidated Fund of India (CFI).
- Article 150: The Union and State accounts are maintained as per the President’s direction, based on CAG’s advice.
- Article 279: The CAG certifies net proceeds of any tax or duty, and the certificate is final.
- Audit Power : The CAG is responsible for auditing financial expenditure at the Union, State, and Panchayati Raj levels.
- Other Audits of CAG:
- IAEA (2022-2027): CAG is the External Auditor for the International Atomic Energy Agency, promoting the safe use of nuclear technologies.
- FAO (2020-2025): CAG audits the Food and Agriculture Organization, working towards global food security.
- Audits of PSUs: The accounts of PSUs are subject to supplementary audit conducted by CAG as per the provisions of Section 143 of the Companies Act, 2013.
- No Provision to ensure Transparency: The Constitution is silent on the procedure for appointing the CAG, raising concerns about executive dominance.
Legal Provisions : CAG Act, 1971
- Tenure: Six years or until the age of 65, whichever is earlier.
- Resignation: Can resign by submitting a letter to the President.
- Service Conditions: Determined by Parliament and cannot be altered to his disadvantage after appointment.
Major Scandals revealed by CAG
- 2G Spectrum Scam: Highlighted irregularities in the allocation of telecom licenses, leading to Supreme Court intervention.
- Coal Block Allocation: Exposed losses due to discretionary coal block allocations.
- Bharatmala Project (2023): Flagged delays and cost overruns in infrastructure development.
- Performance Audit of Ayushman Bharat (2023): Highlighted issues in healthcare delivery under India’s flagship health insurance scheme, including irregularities in beneficiary verification and delayed payments to hospitals.
- Public Distribution System (PDS) Audit: Identified large-scale inefficiencies in the distribution of food grains under the PDS, including diversion and leakage.
- Its recommendations led to digitization of ration cards and better monitoring mechanisms.
Difference Between Office of CAGs in India and Britain
| Aspect |
CAG in India |
CAG in Britain |
| Status |
Constitutional authority under Article 148. |
Appointed as part of the executive branch. |
| Role |
Independent auditor of public accounts and spending. |
Auditor and consultant to Parliament on public spending. |
| Reporting |
Reports directly to the President or Governors, who table them in Parliament or State Legislatures. |
Reports to the UK Parliament through the Public Accounts Committee. |
| Scope of Audit |
Audits all receipts, expenditures, and accounts of the Union, States, and Public Sector Enterprises. |
Primarily focuses on central government accounts, public corporations, and local bodies. |
| Tenure |
Fixed tenure of 6 years or until the age of 65, whichever is earlier. |
Tenure is not constitutionally fixed, depending on contractual terms. |
Reforms Suggested by Vinod Rai for CAG
Vinod Rai, the former CAG of India, suggested several reforms to strengthen the institution and enhance its effectiveness in ensuring transparency and accountability.
Key reforms include:
- Strengthening Financial Autonomy: Advocated for greater independence in financial matters to ensure the CAG operates without external pressures, safeguarding its role as an unbiased auditor.
- Performance Audits: Emphasized the need for performance-based audits instead of just financial compliance, focusing on the outcomes and effectiveness of government schemes and policies.
- Capacity Building: Suggested continuous training and upskilling of CAG staff to handle audits of complex and modern sectors like IT, telecom, and environmental policies.
- Timely Reporting: Proposed mechanisms to expedite audit report submissions, ensuring their relevance and impact during policy-making and parliamentary discussions.
- Use of Technology: Highlighted the importance of adopting advanced data analytics, AI, and IT tools to improve the accuracy and scope of audits in a rapidly digitizing economy.
These reforms aim to make the CAG more dynamic, proactive, and aligned with the challenges of modern governance.
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