Comptroller and Auditor General of India

This article is about Comptroller and Auditor General of India. For similar title in other jurisdictions, see Comptroller and Auditor General.
Comptroller and Auditor General (C&AG)
भारत के नियंत्रक-महालेखापरीक्षक (निमलेप)
Incumbent
Shashi Kant Sharma
since 23 May 2013
Nominator Prime Minister of India
Appointer President of India
Term length 6 yrs or up to 65 yrs of age
(whichever is earlier)
Salary ₹90,000 (US$1,300)[1][2]
Website saiindia.gov.in

The Comptroller and Auditor General (CAG) of India is an authority, established by the Constitution under Constitution of India/Part V - Chapter V/Sub-part 7B/Article 148, who audits all receipts and expenditure of the Government of India and the state governments, including those of bodies and authorities substantially financed by the government. The CAG is also the external auditor of Government-owned corporations and conducts supplementary audit of government companies, i.e., any non-banking/ non-insurance company in which Union Government has an equity share of at least 51 per cent or subsidiary companies of existing government companies. The reports of the CAG are taken into consideration by the Public Accounts Committees (PACs) and Committees on Public Undertakings (COPUs), which are special committees in the Parliament of India and the state legislatures. The CAG is also the head of the Indian Audit and Accounts Department, the affairs of which are managed by officers of Indian Audit and Accounts Service, and has over 58,000 employees across the country.

The CAG is mentioned in the Constitution of India under Article 148 – 151.

The CAG is ranked 9th and enjoys the same status as a judge of Supreme Court of India in Indian order of precedence. The current CAG of India is Shashi Kant Sharma, [3] who was appointed on 23 May 2013. He is the 12th CAG of India.

Appointment

The Comptroller and Auditor-General of India is appointed by the President of India[4] following a recommendation by the Prime Minister. On appointment, he/she has to make an oath or affirmation before the President of India.

Oath or affirmation

"I,A.B.,having appointed Comptroller and Auditor-General of India do swear in the name of God/solemnly affirm that I will bear true faith and allegiance to the Constitution of India as by law established, that I will uphold the sovereignty and integrity of India, that I will duly and faithfully and to the best of my ability, knowledge and judgment perform the duties of my office without fear or favour, affection or ill-will and that I will uphold the Constitution and the laws.

Duties of the CAG

As per the provisions of the constitution, the CAG’s (DPC) (Duties, Powers and Conditions of Service) Act, 1971 was enacted. As per the various provisions, the duties of the CAG include the audit of:

Recent achievements

Recently the CAG under Vinod Rai has constantly been in the limelight for its reports exposing mega corruption, particularly in 2G spectrum scam, Commonwealth Games scam and other scams.[5][6]

Suggested reforms

In June 2012, Lal Krishna Advani a veteran Indian politician and former Deputy Prime Minister of India (as well as former Leader of the Opposition in Indian Parliament)[7] suggested that CAG's appointment should be made by a bipartisan collegium consisting of the prime minister, the Chief Justice of India, the Law Minister and the Leaders of the Opposition in the Lok Sabha and the Rajya Sabha.[8][9] Subsequently, M Karunanidhi, the head of Dravida Munnetra Kazhagam (DMK) party and five times Chief Minister of Tamil Nadu[10] supported the suggestion. Advani made this demand to remove any impression of bias or lack of transparency and fairness because, according to him, the current system was open to "manipulation and partisanship".[8][9] Similar demand was made by many former CEC's such as B B Tandon, N Gopalaswamy and S Y Quraishi,[11] however the government did not seem too keen.[12] CPI MP GURUDAS DASGUPTA wrote a letter to The PM and demand CAG has appointed by the collegium of consisting the PM,the CJI and the leader of the opposition in Lok Sabha but The PM Declined it.former CAG V. K. Shunglu has suggested in its CWG scam report that THE CAG be made a multimember body.PMO minister V.Narayanasamy in his interview with PTI said govt. is considering the shunglu panel report.but PM and Finance Minister declined it.Later V. Narayanasamy said he misquoted but PTI reaffirmed it.

Compensation

The salary and other conditions of service of the CAG are determined by the Parliament of India through "The Comptroller and Auditor-General's (Duties, Powers and Conditions of Service) Act, 1971". As per the act, his salary is the same as salary of Cabinet Secretary [1] Neither his salary nor rights in respect of leave of absence, pension or age of retirement can be varied to his disadvantage after his appointment. The CAG is not eligible for further office either under the Government of India or under the Government of any State after he has ceased to hold his office. These provisions are in order to ensure the independence of CAG.[2][13]

 Salary of CAG
Date Salary
1 January 2006 ₹90,000 (US$1,300)[1][14]

Removal

The CAG can be removed only on an address from both house of parliament on the ground of proved misbehaviour or incapacity.The CAG vacates the office on attaining the age of 65 years age even without completing the 6 years term.

Indian Audit and Accounts Service

The Constitution of India [Article 148] provides for an independent office to the CAG of India. He or she is the head of Indian Audit and Accounts Department. He/She has a duty to uphold the Constitution of India and laws of the Parliament to safeguard the interests of the public exchequer.

The Indian Audit and Accounts Service aids the CAG in the discharge of his/her functions.

Scope of audits

"CAG is not a munimji or an accountant or something like that... He is a constitutional authority who can examine the revenue allocation and matters relating to the economy. CAG is the principal auditor whose function is to go into the economy, effectiveness and efficiency of the use of resources by the government. If the CAG will not do, then who else will do it"

– Observation of a bench of Supreme Court of India while dismissing a petition challenging CAG reports on 2G spectrum, Coal Blocks Allotment, etc.[15]

Audit of government accounts (including the accounts of the state governments) in India is entrusted to the CAG of India who is empowered to audit all expenditure from the Consolidated Fund of the union or state governments, whether incurred within India or outside, all revenue into the Consolidated Funds and all transactions relating to the Public Accounts and the Contingency Funds of the Union and the states. Specifically, audits include:

In addition, the CAG also executes performance and compliance audits of various functions and departments of the government. Recently, the CAG as a part of thematic review on "Introduction of New Trains" is deputing an auditors' team on selected trains, originating and terminating at Sealdah and Howrah stations, to assess the necessity of their introduction.[16] In a path-breaking judgement, the Supreme Court of India ruled that the CAG General could audit private firms in revenue-share deals with government.

CAG has been appointed as external auditor of three major UN organisations: the Vienna-based International Atomic Energy Agency (IAEA), the Geneva-based World Intellectual Property Organisation (WIPO) and World Food Programme (WFP).

CAG has been elected the Chairman of the United Nations' panel of external auditors.[17][18]

Rebecca Mathai is an Indian who is presently the External Auditor of UN organisation World Food Programme(WFP) Headquartered at Rome, Italy.

Reforms suggested by former CAG Vinod Rai

In November 2009, the CAG requested the government to amend the 1971 Audit Act to bring all private-public partnerships (PPPs), Panchayti Raj Institutions and societies getting government funds within the ambit of the CAG.The amendment further proposes to enhance CAG’s powers to access information under the Audit Act. In the past, almost 30% of the documents demanded by CAG officials have been denied to them.[19] The PPP model has become a favourite mode of executing big infrastructure projects worth millions of rupees and these projects may or may not come under the audit purview of the CAG, depending on sources of funds and the nature of revenue sharing agreements between the government and the private entities. Currently, it is estimated that 65 percent of government spending does not come under the scrutiny of the CAG.[20]

Prominent audit reports

Following are some of the most debated CAG reports:

2G Spectrum allocation

Main article: 2G Spectrum scam

A CAG report on issue of Licences and Allocation of 2G Spectrum[21] resulted in a huge controversy. The report estimated that there was a presumptive loss of ₹1,766 billion (US$26 billion) by the United Progressive Alliance, UPA government.[22] In a chargesheet filed on 2 April 2011 by the investigating agency Central Bureau of Investigation (CBI), the agency pegged the loss at ₹310 billion (US$4.6 billion)[23]

All the speculations of profit, loss and no-loss were put to rest on 2 February 2012 when the Supreme Court of India on a public interest litigation (PIL) declared allotment of spectrum as "unconstitutional and arbitrary" and quashed all the 122 licenses issued in 2008 during tenure of A. Raja (then minister for communications & IT in the United Progressice Alliance, UPA government) the main accused.[24] The court further said that A. Raja "wanted to favour some companies at the cost of the public exchequer" and "virtually gifted away important national asset".[25]

Revenue loss calculation was further established on 3 August 2012 when according to the directions of the Supreme Court, Govt of India revised the reserve price for 2G spectrum to ₹140 billion (US$2.1 billion)[26][27]

Coal Mine Allocation

Main article: Coal Mining Scam

A 2012 CAG report on Coal Mine Allocation[28] received massive media and political reaction as well as public outrage. During the 2012 monsoon session of the Parliament, the BJP protested the Government's handling of the issue demanding the resignation of the prime minister and refused to have a debate in the Parliament. The deadlock resulted in Parliament functioning only seven of the twenty days of the session.[29][30]

The CAG report criticised the Government by saying it had the authority to allocate coal blocks by a process of competitive bidding, but chose not to.[31] As a result, both public sector enterprises (PSEs) and private firms paid less than they might have otherwise. In its draft report in March the CAG estimated that the "windfall gain" to the allocatees was ₹10,673 billion (US$160 billion).[31] The CAG Final Report tabled in Parliament put the figure at ₹1,856 billion (US$28 billion)[32]

While the initial CAG report suggested that coal blocks could have been allocated more efficiently, resulting in more revenue to the government, at no point did it suggest that corruption was involved in the allocation of coal. Over the course of 2012, however, the question of corruption came to dominate the discussion. In response to a complaint by the BJP, the Central Vigilance Commission (CVC) directed the CBI to investigate the matter. The CBI named a dozen Indian firms in a First Information Report (FIR), the first step in a criminal investigation. These FIRs accuse them of overstating their net worth, failing to disclose prior coal allocations, and hoarding rather than developing coal allocations.[33][34] The CBI officials investigating the case have speculated that bribery may be involved.[33]

Fodder scam

Main article: Fodder scam

The scandal was first exposed due to the CAG report in the matter in December 1995. The report alleged of fraudulent withdrawal of government funds worth ₹9.5 billion (US$140 million) in the Bihar animal husbandary department against non-existent supplies of fodder and medicines.[35] Subsequently, based on Patna High Court's orders, CBI investigated the case and registered as many as 63 cases. Many accused have been convicted while many cases are still under trial[36]

Krishna-Godavari(KG)D6 gas block

The oil ministry imposed a fine of 7000 Rs. crores on Mukesh Ambani's company for the sharp drop in production of gas and violations mentioned in CAG's 2011 report. Oil ministry did not approve company's US$7.2 billion stake in deal with BP.[37][38][39] So Jaipal Reddy known for his honesty was shifted from oil ministry to the Science and Technology ministry owing to pressure from Reliance group of Industries.[40][41][42] RIL allowed the CAG to begin the audit in April this year after stalling it for a year.But unresolved issues could stall audit of KG Basin, again[43] Then Reliance appointed Defence Secretary Shashikant Sharma as new CAG to audit KG Basin,said Prashant Bhushan.[44] In KG D-6, most of the cost had been recovered by the private player and the increase in price would only go as profit. About 90% of receipts from K-G D-6 were so far booked as expenditure and in the remaining 10%, only 1% was paid to the government and rest 9% went to the operator as profit.[45]

List of Comptroller and Auditors General of India

No. Comptroller and Auditor General of India Year tenure began Year tenure ended
1 V. Narahari Rao 1949 1954
2 A. K. Chanda 1954 1960
3 A. K. Roy 1960 1966
4 S. Ranganathan 1966 1972
5 A. Bakshi 1972 1978
6 Gian Prakash 1978 1984
7 T. N. Chaturvedi 1984 1990
8 C. G. Somiah 1990 1996
9 V. K. Shunglu 1996 2002
10 VN Kaul 2002 2008
11 Vinod Rai 2008 2013
12 Shashi Kant Sharma 2013 Incumbent (6 years tenure or 65 years of age, whichever is earlier

Source:[46]

References

  1. 1 2 3 "THE COMPTROLLER AND AUDITOR-GENERAL'S (DUTIES, POWERS AND CONDITIONS OF SERVICE) ACT, 1971". CAG India. Archived from the original on 27 August 2012. Retrieved 27 August 2012.
  2. 1 2 "CAG – Article 148 of Constitution of India". Retrieved 6 April 2012.
  3. ↑ "http://www.thehindu.com/news/national/defence-secretary-shashi-kant-sharma-to-be-new-cag/article4736437.ece". External link in |title= (help)
  4. ↑ Constitution of India, Article 148 for the period of six years.1
  5. ↑ "A watchdog that bites". The Hindu. Chennai, India. 20 August 2012. Archived from the original on 20 August 2012. Retrieved 27 August 2012.
  6. ↑ B S Arun. "CAG 'activism' gets the thumbs up". Deccan Herald. Archived from the original on 27 August 2012. Retrieved 27 August 2012. Corporate India needs to go through a phase of reflection and soul searching
  7. ↑ "Members Bioprofile". Lok Sabha of India/National Informatics Centre, New Delhi. Retrieved 27 April 2011.
  8. 1 2 "Karunanidhi backs Advani's view on collegium to appoint CAG, EC". Times of India. 5 June 2012. Retrieved 5 October 2012.
  9. 1 2 "Karunanidhi backs Advani's plea for collegium". The Hindu. Chennai. 5 June 2012. Retrieved 5 October 2012.
  10. ↑ "DMK's Official Homepage-Chennai-Tamilnadu-India 800x600 screen resolution". Dmk.in. 9 December 2011. Retrieved 24 January 2012.
  11. ↑ "Collegium needed to select EC: SY Quraishi". Times of India. 16 July 2012. Retrieved 5 October 2012.
  12. ↑ "Ex-CECs backed collegium, Law Ministry not too keen". Indian Express. 10 June 2012. Retrieved 5 October 2012.
  13. ↑ "Chapter V – Constitution of India". http://en.wikisource.org/wiki/Constitution_of_India/Part_V#Chapter_V_.7BComptroller_and_Auditor-General_of_India.7D. External link in |title= (help);
  14. ↑ "The High Court and Supreme Court Judges Salaries and Conditions of Service Amendment Bill 2008" (PDF). PRS India.
  15. ↑ "SC Rejects PIL Against CAG Examining Coal Allotment". Outlook India. 1 October 2012. Archived from the original on 1 October 2012. Retrieved 1 October 2012.
  16. ↑ "Comptroller and Auditor General lens on trains introduced by Mamata Banerjee". The Times Of India. 12 July 2012.
  17. ↑ "CAG Vinod Rai elected U.N. external audit panel chief". The Times Of India. 8 December 2011. Retrieved 28 February 2012.
  18. ↑ "CAG Vinod Rai to head UN audit panel". The Times Of India. 9 December 2011. Retrieved 28 February 2012.
  19. ↑ Four years on, UPA govt yet to accept CAG's request for more powers | Latest News & Updates at DNAIndia.com
  20. ↑ After shaking and hurting the govt he is retiring - News Oneindia
  21. ↑ "Report No. -19 of 2010-11 for the period ended March 2010 Performance Audit of Issue of Licences and Allocation of 2G Spectrum by the Department of Telecommunications ( Ministry of Communications and Information Technology)". CAG. Retrieved 17 April 2015.
  22. ↑ "Performance Audit Report on the Issue of Licences and Allocation of 2G Spectrum" (PDF). Archived from the original (PDF) on 21 March 2012. Retrieved 5 January 2012.
  23. ↑ "2G loss? Govt gained over Rs.3,000cr: Trai". Times of India. 7 September 2011.
  24. ↑ "SC quashes 122 licences". Times of India. 2 February 2012.
  25. ↑ "2G verdict: A Raja 'virtually gifted away important national asset', says Supreme Court". Times of India. 2 February 2012.
  26. ↑ "Cabinet sets Rs 14,000 cr as reserve price for 2G spectrum". Firstpost. 4 August 2012. Retrieved 8 August 2012.
  27. ↑ Singh, Shalini (8 August 2012). "Cabinet decision on 2G auction price demolishes zero-loss theory". The Hindu. Chennai, India. Retrieved 8 August 2012.
  28. ↑ "Report No. - 7 of 2012-13 for the period ended March 2012 - Performance Audit of Allocation of Coal Blocks and Augmentation of Coal Production (Ministry of Coal)". CAG. Retrieved 17 April 2015.
  29. ↑ "Turmoil-ridden Monsoon session of Parliament ends". DNA. Retrieved 7 September 2012.
  30. ↑ http://timesofindia.indiatimes.com/india/Stalling-Parliament-is-also-part-of-democracy-Sushma-says/articleshow/16296444.cms. Retrieved 7 September 2012. Missing or empty |title= (help)
  31. 1 2 ""Draft Performance Audit, Allocation of Coal Blocks and Augmentation of Coal Production by Coal India Limited" Report of the Comptroller and Auditor General of India (Union Government (Commercial))" (PDF). Comptroller and Auditor General of India (Union Government (Commercial)). Retrieved 8 September 2012. Hereafter Draft CAG Report.
  32. ↑ "Transcript: Prime Minister Manmohan Singh Counters 'Coalgate' Allegations - India Real Time - WSJ". The Wall Street Journal.
  33. 1 2 Firms hid earlier allocations to get new blocks, says CBI - Hindustan Times Archived 4 November 2013 at the Wayback Machine.
  34. ↑ Coalgate: Now, DMK leader in the dock
  35. ↑ "CBI orders prosecution of Laloo, Mishra in fodder scam". Rediff.com. April 1996. Archived from the original on 31 May 2010. Retrieved 1 October 2012.
  36. ↑ "Fodder scam case: 58 convicted, given jail terms", Times of India, 31 May 2007, archived from the original on 1 May 2009, retrieved 5 November 2008, Snippet: ... A total 63 cases were registered in the scam and 41 were transferred to Jharkhand after it was created from Bihar in November 2000 ... The CBI has filed charge sheets in almost every case and trials are under progress. Till now the special CBI court has passed judgment in 16 cases and nearly 200 accused in different cases have been punished with two to seven years imprisonment ...12121
  37. ↑ Steep Fall in Gas Output: Rs 7000cr Fine on Reliance | IndiaWires
  38. ↑ Archived 29 October 2013 at the Wayback Machine.
  39. ↑ "Jaipal Reddy's shift from Oil Ministry creates a political storm". The Times Of India. 30 October 2012.
  40. ↑ Reddy, B. Muralidhar (29 October 2012). "PM owes an explanation on shifting Jaipal Reddy: BJP, SP". The Hindu. Chennai, India.
  41. ↑
  42. ↑ CAG audit of Krishna-Godavari D6 gas block resumes - The New Indian Express
  43. ↑ dna special: Unresolved issues could stall audit of KG Basin, again | Latest News & Updates at DNAIndia.com
  44. ↑ Bhushan questions new CAG selection | Business Standard
  45. ↑ "CAG may look into likely profit for RIL from gas price hike - The Times of India". The Times Of India. 2 July 2013.
  46. ↑ "Former CAG". Retrieved 9 May 2012.

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