CHAPTER V: Comptroller and Auditor-General of India

Article 149: Duties and Powers of the Comptroller and Auditor-General of India

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The Comptroller and Auditor-General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States as were conferred on or exercisable by the Auditor-General of India immediately before the commencement of this Constitution in relation to the accounts of the Dominion of India and of the Provinces respectively.

Explanations

Article 149 of the Indian Constitution defines the duties and powers of the Comptroller and Auditor-General (CAG), a critical institution for ensuring financial accountability in the government’s administration. The CAG is tasked with auditing the financial records of the Union, the States, and various public bodies, providing an essential oversight mechanism for public finances.

Key Provisions

1. Scope of Duties

The CAG’s role is to audit the accounts of both the Union and the States, as well as other bodies and authorities. The scope of these duties is determined by laws enacted by Parliament. Until such laws are enacted, the CAG’s duties mirror those of the Auditor-General of India under British rule, with a focus on safeguarding public resources and ensuring financial propriety.

2. Exercising Powers

The CAG’s powers allow it to audit expenditures, scrutinize financial decisions, and ensure that public funds are used in line with budgetary allocations. These powers are crucial for detecting financial mismanagement and corruption within public bodies, ensuring accountability in governance.

Amendments and Real-life Examples

While there have been no direct amendments to Article 149, the Comptroller and Auditor-General’s (Duties, Powers, and Conditions of Service) Act, 1971, has been instrumental in expanding the CAG’s role. This legislation codifies the duties and powers of the CAG, allowing it to audit not just the Union and State governments, but also government-owned corporations and entities receiving government funds.

Example: Commonwealth Games, 2010

An important example of the CAG’s work is the audit of the Commonwealth Games in 2010, where significant mismanagement of funds was highlighted. The CAG’s findings led to increased public scrutiny, legal proceedings, and demands for improved financial governance in organizing major events.

Historical Significance

The CAG’s office is a legacy of the British administration’s efforts to ensure accountability in colonial finances. The Auditor-General of India, created under the Government of India Act, 1935, evolved into the CAG after the Constitution came into effect in 1950. This transition marked a shift from colonial oversight to a key pillar of financial oversight in independent India’s democratic framework. The CAG's role has since expanded to cover a wide array of public institutions, cementing its status as a guardian of public funds.

Legislative History

Article 149 of the Indian Constitution initially drafted and deliberated as Article 125 of the Draft Constitution, was ultimately integrated into the Indian Constitution on May 30, 1949.

Debates and Amendments

During the debates, Pandit Hirday Nath Kunzru proposed an amendment to substitute "the Government of any State" with "the Government of any State or any other authority" in Article 125. His objective was to empower Parliament to confer additional duties on the Comptroller and Auditor-General (CAG), allowing them to audit various autonomous corporations, such as the Damodar Valley Corporation and potential future entities like a proposed Railway Authority.

Kunzru emphasized that these corporations, managing significant public funds, should be subject to independent audit by the CAG to ensure financial soundness and accountability, avoiding dependency on reports by auditors appointed by these corporations.

Dr. B.R. Ambedkar proposed an amendment to substitute the Explanation in Article 125 with one including laws, ordinances, orders, by-laws, rules, and regulations made before the commencement of the Constitution. This aimed to ensure continuity of the CAG's functions, which are currently regulated by instruments created under the Government of India Act, 1935, maintaining their validity post-Constitution.

Shri R.K. Sidhwa raised concerns about the current system, which allows the Auditor-General to pass bills exceeding budget grants if the Minister asserts parliamentary confidence. He argued that this could lead to misuse and undermine democratic principles. Sidhwa suggested including a constitutional provision prohibiting the Auditor-General from passing expenditures beyond budget allocations, emphasizing strict adherence to budget provisions to prevent arbitrary financial decisions by the executive.

Dr. P.S. Deshmukh argued that the article already provided adequate provisions for Parliament to authorize the CAG to audit various entities. He emphasized the fundamental principle that budget provisions should not be exceeded, viewing it unnecessary to include such a restriction in the Constitution.

The outcome of the discussions saw Pandit Hirday Nath Kunzru's amendment, with modifications excluding the words "or any local," accepted by Dr. Ambedkar. Additionally, Dr. Ambedkar's revised Explanation was adopted to ensure continuity of regulations governing the CAG's duties.

Ultimately, Article 125, as amended, was adopted, allowing Parliament to prescribe additional duties to the CAG, including the audit of autonomous corporations, thereby ensuring financial integrity.

References

• The Constitution of India
• The Comptroller and Auditor-General’s (Duties, Powers, and Conditions of Service) Act, 1971
• CAG Report on the Commonwealth Games, 2010