Answer

The Comptroller and Auditor General (CAG), established under Article 148 of the Constitution, acts as the guardian of public finance, ensuring transparency and accountability in government spending. As per the CAG’s audit reports, lapses in fiscal management, including inefficiencies in expenditure and revenue collection, highlight its crucial role in enforcing financial discipline and constitutional propriety.

Constitutional Position of CAG as a Watchdog of Public Finance

• Comprehensive Audit Powers: CAG audits Union and state finances, including government accounts, public sector undertakings, and off-budget borrowings.
  For example: The CAG report on Kerala’s off-budget borrowing highlighted concerns about fiscal transparency and financial prudence.
• Parliamentary Oversight: CAG’s reports form the basis for Parliamentary financial committees, enhancing executive accountability.
  For example: The Public Accounts Committee (PAC) relies on CAG’s reports to scrutinize government spending and policy execution.
• Three-Tier Auditing: CAG conducts compliance, financial, and performance audits, ensuring efficiency, transparency, and effectiveness in public expenditure.
  For example: The Delhi Excise Policy audit exposed revenue leakages, irregularities in licensing, and policy loopholes.
• Limited Comptroller Role: Unlike in the UK, India’s CAG does not have pre-expenditure approval powers, limiting real-time financial control.
  For example: The Compensatory Afforestation Fund Management and Planning Authority (CAMPA) audit in Uttarakhand exposed delays in afforestation projects and misuse of environmental funds.
• Independence from Executive: CAG is appointed by the President and removed like a Supreme Court judge, ensuring security of tenure.
  For example: Article 148 ensures CAG’s salary and expenses are charged on the Consolidated Fund of India, shielding it from executive control.

Impact of Appointment Process on CAG’s Independence

• Executive Control Over Appointment: The President appoints CAG on executive advice, lacking parliamentary or independent oversight.
• Risk of Political Influence: An executive-controlled appointment raises concerns of bias in audits related to government decisions.
  For example: The delayed tabling of the Delhi Excise Policy audit led to allegations of political interference.
• No Fixed Selection Criteria: The Constitution provides no clear qualifications for appointing CAG, making the process opaque and discretionary.
• Ineligibility for Further Office: While CAG cannot hold any post after retirement, lack of post-retirement restrictions on private sector roles raises concerns.
• Limited Oversight Over CAG’s Performance: Unlike judicial and election commissions, no mechanism exists to review CAG’s efficiency or integrity.

However there are some positive  instances of Appointment Process on CAG’s Independence

• Presidential Appointment: CAG is appointed by the President under Article 148, ensuring a constitutionally mandated selection process.
• Security of Tenure: Removal requires a process similar to that of a Supreme Court judge, ensuring freedom from executive pressure.
  For example: No CAG has ever been removed arbitrarily, reinforcing its independence in auditing financial decisions.
• Charged Expenditure: CAG’s salary and allowances come from the Consolidated Fund of India, preventing financial dependency on the government.
  For example: Unlike regular government officers, CAG’s funds cannot be curtailed without legislative approval.

Reforms to Strengthen CAG While Maintaining Federal Balance and Autonomy

• Independent Selection Committee: Establish a bipartisan committee for appointing CAG, ensuring transparency and merit-based selection.
• State-Level Auditor Generals: Creating separate audit bodies for states, like public service commissions, to address federal concerns.
• Time-Bound Submission of Reports: Mandate a fixed timeline for presenting CAG reports in legislatures to prevent undue delays.
  For example: Article 151 allows governments to table reports at will, impacting timely legislative scrutiny.
• Strengthening Parliamentary Oversight: Enhance PAC and CoPU’s tenure and provide them with technical audit experts for better scrutiny.
• Audit Mechanism for CAG: Introduce peer-review mechanisms or external audits to ensure CAG’s accountability without compromising autonomy.

A truly independent CAG is vital for financial integrity and governance. Strengthening the appointment process through a collegium system, ensuring fixed tenure, and granting greater access to real-time audits will enhance effectiveness. Institutional reforms must balance federal autonomy while upholding parliamentary oversight, ensuring a strong  and accountable democracy.

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