Question

Which of the following statements is/are correct about the duties of the CAG?

i. The CAG audits all expenditure from the Consolidated Fund of India but not the Contingency Fund of India.

ii. The CAG advises the President on the form in which the accounts of the Centre and states should be maintained.

iii. The CAG submits audit reports on state accounts to the President, who presents them to the Parliament.

iv. The CAG certifies the net proceeds of any tax or duty, and this certificate is final.

• A. Only ii and iv
• B. Only i and iii
• C. Only ii and iii
• D. Only i, ii, and iv

Answer 1

Answer:

A. Only ii and iv

Comptroller and Auditor General of India (CAG)

Background and Constitutional Mandate

• The CAG is an independent constitutional authority established under Article 148 of the Indian Constitution.

• CAG's primary role is to audit the accounts of the Union government, state governments, and government bodies, ensuring accountability and transparency in public expenditure.

Key Duties and Powers of the CAG

• Article 149 of the Constitution mandates the CAG to audit government accounts and report on them.

• The CAG audits all expenditure from the Consolidated Fund of India and the Contingency Fund of India, as well as the Public Accounts of India. Similarly, for states, all expenditure from their Consolidated Fund and Contingency Fund, and Public Accounts are audited. Therefore, statement (i) is incorrect as the CAG audits the Contingency Fund of India.

• The CAG prescribes the form in which accounts of the Union and States are to be kept, after consulting the President or the Governor of a State, respectively. This aligns with statement (ii).

• The CAG submits audit reports relating to the accounts of the Union to the President, who shall cause them to be laid before each House of Parliament. For the States, the CAG submits audit reports to the Governor of the State, who shall cause them to be laid before the State Legislature. Therefore, statement (iii) is incorrect because state audit reports are submitted to the Governor, not the President.

• The CAG is empowered to certify the net proceeds of any tax or duty, which forms the divisible pool between the Union and the States. This certificate is considered final and binding, supporting statement (iv).

• The CAG's reports are presented to Parliament (or State Legislature) and are then examined by the Public Accounts Committee (PAC) and the Committee on Public Undertakings (COPU), which are parliamentary committees.

• CAG also audits receipts of the government, including revenue from taxes, duties, and other sources.

Competitive Exam Significance

• Understanding the CAG's powers and duties is crucial for Indian Polity and Governance sections of competitive exams like UPSC Civil Services, State PSCs, SSC, etc.

• Questions often test the specific articles related to CAG and the scope of its audit powers.

• The distinction between the Consolidated Fund, Contingency Fund, and Public Accounts, and the CAG's role in auditing them, is a frequent area of examination.