CHAPTER V: Comptroller and Auditor-General of India

Article 150: Form of Accounts of the Union and of the States

--- Original Article ---

The accounts of the Union and of the States shall be kept in such form as the President may, on the advice of the Comptroller and Auditor-General of India, prescribe.

1. Subs. by the Constitution (Forty-second Amendment) Act, 1976, s. 27, for art. 150 (w.e.f. 1-4-1977).

2. Subs. by the Constitution (Forty-fourth Amendment) Act, 1978, s. 22, for "after consultation with" (w.e.f. 20-6-1979).

Explanations

Article 150 is pivotal in ensuring a consistent framework for maintaining the financial records of both the Union and the States. It aims to bring about uniformity and coherence in accounting procedures, providing clarity and transparency in the financial dealings of the governments. This article also highlights the influential role of the Comptroller and Auditor-General of India in shaping public finance standards.

Key Provisions

1. Uniform Format for Accounts

The Union and the States are required to maintain their accounts in a specific form. The President of India prescribes this form, thereby ensuring that financial records are standardized across different levels of government.

2. Binding Nature of CAG’s Advice

The Comptroller and Auditor-General of India is entrusted with the responsibility of advising the President on the format in which the accounts should be maintained. This ensures that the financial records conform to principles of public accountability and fiscal prudence.

Amendments

Forty-Second Amendment (1976)

This amendment marked a change in Article 150, bringing a constitutional mandate for maintaining accounts in a uniform form. Before this, the form of accounts was less structured, which posed challenges in comparing financial data across states and the Union.

Forty-Fourth Amendment (1978)

The amendment refined the language of the article by substituting "after consultation with" the CAG to "on the advice of" the CAG, effectively making the CAG’s recommendations binding on the President. This shift emphasized the importance of expert oversight in financial matters, aligning with global standards of public financial management.

Historical Significance

The amendments to Article 150 reflect India’s growing emphasis on financial discipline and the need for expert oversight in the management of public funds. The Forty-Second Amendment laid the groundwork for a unified accounting system, while the Forty-Fourth Amendment elevated the role of the CAG in ensuring that financial reports are accurate, transparent, and reflective of fiscal realities. The CAG’s pivotal role underscores India’s commitment to strengthening institutions that promote good governance.

Real-life Example

A notable application of Article 150 can be observed in the process of auditing state budgets. For instance, the CAG’s guidelines were instrumental in developing the standard formats used in Outcome Budgets and Performance Audits, which assess not only the financial allocations but also the effectiveness of public expenditure. This uniformity aids in comparing the financial management of various states, thereby promoting accountability in the allocation and utilization of public funds.

Legislative History

Article 150 of the Indian Constitution, originally introduced and debated as Article 126 of the Draft Constitution, was subsequently enshrined in the Indian Constitution on May 30, 1949.

Debates and Amendments

No amendments were proposed, and no discussions were held regarding Article 150 during the session. The article was adopted into the Indian Constitution in its original form.

References

• The Constitution (Forty-second Amendment) Act, 1976, s. 27
• The Constitution (Forty-fourth Amendment) Act, 1978, s. 22
• Reports by Comptroller and Auditor-General of India on State Finances