A Matter of Integrity: As Indian Democracy Matures, CAG’s Role is Becoming More Vital


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A Matter of Integrity: As Indian Democracy Matures, CAG’s Role is Becoming More Vital Blog Image

Why in News?

  • India’s democratic journey has always emphasised the principles of individual rights, equality, accessibility, rule of law, separation of powers, universal suffrage, and public participation.
  • Today, India stands as the world’s largest democracy, with a vibrant political landscape, a diverse society, and ongoing efforts to overcome various socio-economic challenges.
  • The Comptroller and Auditor General of India (CAG) plays a crucial role in this democratic framework.

The Office of CAG of India

  • The CAG is an independent authority under the Constitution of India (Article 148), who is the head of the Indian audit and account department and chief guardian of public purse.
    • Article 148:There shall be a CAG of India who shall be appointed by the President by warrant under his hand and seal and shall only be removed from office in like manner and on like grounds as a Judge of the Supreme Court.
  • It is the institution through which the government and other public authorities (all those who spend public funds) are held accountable to Parliament and State Legislatures, and hence to the people.

Role of the CAG in India’s Democratic Framework

  • To Ensure Transparency and Accountability
    • The CAG's primary function is to audit government expenditures and revenue collection. By doing so, CAG maintains transparency in financial matters.
    • Auditing also holds the government accountable for how it spends public funds.
    • This is essential in a democracy to prevent misuse of taxpayer money and ensure that the government acts in the best interests of the citizens.
  • To Safeguard Separation of Powers
    • The CAG plays a crucial role in maintaining the separation of powers between the legislative and executive branches of the government.
    • By auditing government finances, the CAG ensures that the executive (the government) aligns its financial activities with the legislative intentions (laws and budgets passed by the legislature).
    • This upholds the democratic principle that no one branch of government becomes too powerful or unaccountable.
  • Promoting Good Governance
    • The CAG's audit findings and recommendations are not just about identifying financial irregularities; they also serve to promote good governance practices.
    • By pointing out inefficiencies and discrepancies, the CAG encourages the government to streamline its operations and adhere to financial discipline.
    • This, in turn, can lead to more effective and efficient governance.

The Role of CAG in Auditing the Achievements of SDGs

  • Integration of SDG Auditing
    • Auditing the achievements of the SDGs is an integral part of the CAG's audit work.
    • This shows the commitment of the CAG to evaluate and ensure progress towards the SDGs in India.
  • To Promote Global Efforts Towards SDGs as a Member of UN Board of Auditors
    • The CAG is a member of the UN Board of Auditors, a significant international body.
    • In 2017, the CAG took up the audit of SDGs as a cross-cutting theme in the UN Audit.
    • This indicates that India is actively participating in global efforts to assess and promote sustainable development.

The Process of Auditing Local Governments and CAG’s Role

  • Primary Audit Responsibility
    • The primary audit of local government accounts and the issuance of audit certificates are carried out by local fund auditors designated by state governments.
    • These auditors are responsible for examining the financial records and transactions of local governments.
  • CAG's Hand Holding Role
    • The CAG plays a supportive role in improving local governance and strengthening democracy.
    • This includes capacity building initiatives for state local fund auditors in areas such as audit planning and audit methodologies.
    • This assistance is provided through Technical Guidance and Support (TGS), as recommended by the 11th Finance Commission.
  • Manuals and Guidance
    • The CAG has issued numerous manuals and guidance documents that serve as foundational resources for auditing and accounting by local governments.
    • These documents help standardise auditing procedures and promote accountability.
  • Annual Technical Inspection Reports (ATIR)
    • CAG's state audit offices are responsible for ATIRs.
    • These reports assess the performance of local governments in delivering services related to devolved functions, focusing on how effectively these services reach the grassroots level.
  • Addressing the Shortage of Competent Accountants
    • There is a shortage of competent accountants willing to work in local governments, especially in remote areas.
    • To address this issue, the CAG, in collaboration with the Institute of Chartered Accountants of India, has initiated online courses.

The Importance of Involving Citizens in the Audit Process

  • Makes the Audit a Citizen-Centric Approach
    • Placing Indian citizens at the centre of government program implementation emphasises the fact that they are the ultimate beneficiaries.
    • This approach aligns with the principles of inclusivity and leaving no one behind, which are key elements of the SDGs.
  • Citizens’ Involvement Places an Onerous Expectation on CAG
    • There is an onerous expectation on CAG to assess the preparedness and planning of government programs and to monitor and recommend corrective actions for achieving economic, social, and environmental aspirations.
    • This highlights the critical role of the CAG in holding the government accountable for the success of these programs.
  • Citizen Involvement is Necessary for Audit Improvement
    • Citizen engagement is crucial for identifying high-risk areas of possible mismanagement and inefficiencies in governance.
    • By actively involving citizens, audits can better focus their efforts and become more effective.

Various Stages of Citizen Engagement Framework

  • CAG’s framework for engagement with citizens at various stages of audit encompasses an Audit Advisory Board.
  • It also includes external domain experts, stakeholders’ meetings workshops, beneficiary surveys during audits.
  • These boards and experts use the results of social audit to aid CAG’s audit, lay of audit reports in Parliament, state legislature and also upload them on website for information of citizens. 

Ways to Improve Citizen Engagement

  • By Leveraging Technology
    • Leveraging technology and digital solutions make audit’s citizen engagement more effective and scalable.
    • With increasing mobile density, smartphone applications may be used to solicit society’s suggestions.
  • Social Auditing
    • The Parliament passed the National Rural Employment Guarantee Act, whereby Gram Sabhas were required to conduct regular social audits of all projects taken up under the scheme within the Gram Panchayat.
    • The Mahatma Gandhi National Rural Employment Audit of Scheme Rules 2011envisaged social audit units in each state as well as the audit process for social audit and follow-up action.
    • The ambit of social audit needs to be enlarged.


  • Democracy's strength comes from the combination of accountability and citizen involvement.
  • While the CAG promotes good governance, transparency, and accountability, the duty to uphold democratic values extends to both institutions and individual citizens.

Q1) What are Sustainable Development Goals (SDGs)?

The Sustainable Development Goals (SDGs), otherwise known as the Global Goals, are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity.

Q2) What are the duties and powers of CAG?

The Constitution (Article 149) authorises the Parliament to prescribe the duties and powers of the CAG in relation to the accounts of the Union and of the states and of any other authority or body. Accordingly, the Parliament enacted the CAG’s (Duties, Powers, and Conditions of Service) Act, 1971. Among his major duties are auditing the accounts related to all expenditures from the Consolidated Fund of India, the consolidated fund of each state, and the consolidated fund of each union territory having a Legislative Assembly and auditing all expenditures from the Contingency Fund of India and the Public Account of India as well as the contingency fund of each state and the public account of each state.

Source: The Indian Express