Question

Consider the following statements about the CAG’s audit responsibilities:

(i) The CAG audits all receipts of the Centre and states to ensure effective checks on revenue assessment, collection, and allocation.

(ii) The CAG audits the accounts of local bodies only when requested by the President or Governor.

(iii) The CAG’s certificate on the net proceeds of any tax or duty is final, as per Article 279.

(iv) The CAG submits audit reports on state accounts directly to the state legislature.

Which of these statement(s) is/are correct?

• A. (i), (ii), and (iii) only
• B. (ii), (iii), and (iv) only
• C. (i), (iii), and (iv) only
• D. (i), (ii), and (iii) only

Answer 1

Answer:

A. (i), (ii), and (iii) only

Comptroller and Auditor General (CAG) of India

• Article 149 of the Constitution: Defines the CAG as an authority who shall exercise such powers and perform such duties as may be prescribed by or under any law made by Parliament.

• CAG audits all receipts of the Centre and States: This includes ensuring that revenue assessment, collection, and allocation processes are effective and comply with legal provisions. This function is crucial for maintaining fiscal discipline and preventing revenue leakage.

• Audit of Local Bodies: The CAG audits the accounts of local bodies (Panchayats and Municipalities) only when specifically requested by the President or the Governor. This is in line with the principle that the CAG's primary mandate is to audit government accounts, and the audit of local bodies is undertaken under specific directives.

• Certification of Net Proceeds of Taxes (Article 279): The CAG's certificate on the net proceeds of any tax or duty, which is essential for determining the share of states in divisible taxes, is final. This provision ensures fairness and accuracy in the distribution of central taxes among the states.

• Submission of Audit Reports (State Accounts): The CAG submits audit reports relating to the accounts of a State to the Governor thereof, who shall cause them to be laid before the Legislature of the State. This ensures legislative oversight over state finances. Similarly, for central accounts, the reports are submitted to the President.