CAG Duties and Powers Explained (Article 149)

CAG duties powers rest on Article 149 of the Constitution, which authorises Parliament to prescribe, by law, the duties and powers the Comptroller and Auditor-General of India (CAG) exercises over the accounts of the Union, the states, and any other authority or body so specified. The provision is deliberately open-ended: until Parliament legislates on the subject, the CAG continues to exercise the same duties and powers that the Auditor-General of India held immediately before the Constitution commenced. Parliament used this authority to enact the Comptroller and Auditor-General's (Duties, Powers and Conditions of Service) Act, 1971, which remains the statutory basis of the CAG's audit jurisdiction today.

The Constitutional Framework: Articles 148 to 151

Article 148 sets up the office of the CAG as an independent constitutional authority. The CAG is appointed by the President by warrant under hand and seal, and can be removed only on the same grounds and through the same process as a Supreme Court judge — a resolution passed by both Houses of Parliament with special majority, on the ground of proved misbehaviour or incapacity. Article 149, the specific subject of this note, hands Parliament the job of spelling out what the CAG actually does. Article 150 requires the accounts of the Union and the states to be kept in whatever form the President prescribes on the CAG's advice. Article 151 requires audit reports on Union accounts to go through the President, who lays them before Parliament, and reports on state accounts to go through the Governor concerned, who lays them before the state legislature.

Duties of the CAG under the 1971 Act

Parliament's 1971 Act spells out a wide duty list. The table groups it by area of audit.

Area of Audit	What the CAG Does
Consolidated Fund	Audits all expenditure from the Consolidated Fund of India and the consolidated fund of every state and Union Territory with a legislative assembly
Contingency Fund & Public Account	Audits transactions relating to the Contingency Fund of India and the Public Account of India, and their state-level equivalents
Departmental accounts	Audits trading, manufacturing, profit-and-loss accounts, balance sheets, and subsidiary accounts kept by Union and state government departments
Grant-aided bodies	Audits receipts and expenditure of bodies substantially financed from central or state revenues, and of bodies receiving grants or loans for specific purposes
Revenue receipts	Audits the receipts of the Centre and states to check that assessment, collection, and allocation procedures work effectively
Stores and stock	Audits accounts of stores and stock kept across government offices and departments
Government companies	Audits accounts of government companies under the Companies Act
Statutory corporations	Audits corporations whose governing statutes provide for CAG audit
Other bodies	Audits any other body or authority when requested by the President or a Governor, such as select local bodies

Beyond auditing, the CAG advises the President on the form of Union and state accounts (Article 150), routes audit reports through the President and Governors (Article 151), certifies the net proceeds of a tax or duty for Article 279 purposes — a certificate treated as final — and compiles and maintains the accounts of state governments. The CAG also acts as a technical resource for Parliament's Public Accounts Committee. Note that the CAG's role in compiling Union government accounts ended in 1976, once accounting was separated from audit at the Centre.

Powers Attached to the Audit Function

To carry out these duties, the CAG can inspect any office or department subject to audit, question the officials in charge, call for records and documents from any audited entity, and decide the extent and manner of an audit. These operational powers make the duty list enforceable rather than merely advisory.

Legal, Propriety and Performance Audit

The 1971 Act requires the CAG to verify whether money shown as disbursed was legally available for, and applied to, its stated purpose, and whether expenditure conforms to the authority governing it. This legal and regulatory audit is compulsory. Alongside it, the CAG may — at discretion — conduct a propriety audit, examining the wisdom, faithfulness, and economy of expenditure and flagging wastefulness or extravagance. A 2006 Finance Ministry office memorandum further clarified that performance audit, assessing the economy, efficiency, and effectiveness with which public funds meet their stated objectives, also falls within the CAG's mandate.

Comptroller in Name, Auditor in Practice

The constitutional title suggests the CAG is both comptroller and auditor, but in practice the office functions almost entirely as an auditor. Departments can draw money from the Consolidated Fund by issuing cheques without the CAG's prior clearance; the CAG reviews the transaction only afterward, at the audit stage. Britain's Comptroller and Auditor-General, by contrast, must approve withdrawals from the exchequer before the executive can access them.

The CAG's reach over public-sector audit also varies by entity. Some corporations are audited directly and fully by the CAG; others are audited by private professional auditors appointed by the Central Government in consultation with the CAG, who may still run a supplementary audit; a third category is audited exclusively by private auditors, with reports going straight to Parliament and no CAG role at all. Government companies follow a related pattern — private auditors appointed on the CAG's advice, with the CAG retaining the option of a supplementary or test audit.

Constraints and Criticism

Audit freedom is uneven across categories: on expenditure audit the CAG independently decides scope and designs its own audit codes, while other categories require rules approved by the executive. Secret service expenditure sits largely outside effective audit — the CAG cannot demand a detailed account of it and must accept a certificate from the competent authority instead.

American public-administration scholar Paul H. Appleby criticised the CAG sharply in his reports on Indian administration, arguing that audit had a repressive effect on decision-making, carried over colonial-era assumptions, and mattered less than Parliament assumed — he even recommended abolishing the office. Decades later, the Second Administrative Reforms Commission (2005–2009) flagged a narrower, procedural weakness: only about 15 to 20 of the 1,000 to 1,500 audit paragraphs the CAG places before Parliament each year get detailed Public Accounts Committee scrutiny, and departmental "action taken" responses to the rest tend to stay formal rather than substantive.

UPSC Relevance

Prelims

Article 149 lets Parliament, not the Constitution, define the CAG's detailed duties and powers; the governing law is the CAG's (Duties, Powers and Conditions of Service) Act, 1971.
Article 150 (form of accounts) and Article 151 (audit reports via President/Governor) are often paired with Article 149.
Distinguish legal/regulatory audit (obligatory) from propriety and performance audit (discretionary in origin; performance audit clarified by a 2006 office memorandum).

Mains

GS2: The CAG's evolving role — from a legal/regulatory auditor to one also conducting propriety and performance audit — and the debate over whether this amounts to auditing government policy rather than execution.
GS2: Constraints on effectiveness — weak PAC follow-through on audit paragraphs, the secret-service exemption, and India's "auditor-only" CAG versus Britain's comptroller-cum-auditor model.

FAQ

Q1. What does Article 149 say? It empowers Parliament to prescribe, by law, the CAG's duties and powers over Union, state, and other public accounts; until such a law exists, the CAG exercises the same duties and powers the Auditor-General of India held before the Constitution commenced.

Q2. Which law defines the CAG's duties and powers today? The CAG's (Duties, Powers and Conditions of Service) Act, 1971, enacted under Article 149.

Q3. Does the CAG control spending before it happens? No. The CAG functions as an auditor, not a comptroller — departments draw funds without prior CAG approval; the CAG reviews the transaction only at the audit stage.

Q4. Legal audit versus propriety audit? Legal audit checks that expenditure was authorised and legally applied, and is obligatory. Propriety audit examines the wisdom, faithfulness, and economy of expenditure, and is discretionary.

Q5. How are CAG reports placed before the legislature? Union reports go via the President to Parliament; state reports go via the Governor to the state legislature (Article 151), after which the Public Accounts Committee examines them.

Quick Revision

Article 149 — Parliament prescribes the CAG's duties/powers; until then, pre-constitutional Auditor-General powers continue.
Governing law: CAG's (Duties, Powers and Conditions of Service) Act, 1971.
Related articles: 148 (office/appointment/removal), 150 (form of accounts), 151 (audit reports), 279 (certifying net tax proceeds).
Legal/regulatory audit is obligatory; propriety audit and performance audit are discretionary in origin (performance audit clarified by a 2006 Finance Ministry memorandum).
India's CAG functions as Auditor-General in practice, not as Comptroller — unlike Britain's CAG.
Appleby's 1950s critique called for abolishing the office; ARC-II (2005–09) instead flagged weak Public Accounts Committee follow-through.

Sources

Further Reference

For deeper reading on this topic and the wider polity syllabus, these standard works are recommended:

M. Laxmikanth, Indian Polity (McGraw Hill) — the standard UPSC handbook.
D.D. Basu, Introduction to the Constitution of India (LexisNexis) — authoritative constitutional-law treatment.
The Constitution of India — Bare Act — the official text.

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Duties and Powers of CAG (Article 149)

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