CAG of India: Articles 148-151, Appointment, Powers, and Reports

CAG full form: the Comptroller and Auditor General of India — the supreme audit institution created by Article 148 of the Constitution to audit every receipt into, and every rupee of expenditure from, the funds of the Union and the States. The current CAG is K. Sanjay Murthy, the 15th holder of the office, sworn in on 21 November 2024.

The CAG of India is the constitutional auditor of every rupee that leaves the Consolidated Fund of India and every rupee that flows into it. Established under Article 148 of the Constitution, the CAG of India is the single most powerful institution of public financial accountability — Dr. B.R. Ambedkar called the office “probably the most important officer in the Constitution of India.” Articles 148 to 151 set out the appointment, conditions of service, duties, and reporting obligations of the Comptroller and Auditor General, and the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971 fleshes out the statutory detail.

The CAG of India audits the accounts of the Union, every State, every Union Territory with a legislature, all bodies and authorities substantially financed from Union or State revenues, government companies, and certain corporations. The audit reports are tabled in Parliament, examined by the Public Accounts Committee, and form the bedrock of legislative scrutiny over the executive. In 2024-25, however, the delayed laying of audit reports — including reports on Ayushman Bharat, Dwarka Expressway, and Bharatmala Pariyojana — reignited debate over the institution’s independence.

This explainer walks through the constitutional scheme of the CAG of India, the appointment and removal process, the duties and powers, the three kinds of audit reports, the relationship with the PAC, and the recent controversies that test the institution’s autonomy.

Quick Facts on the CAG of India

• Constitutional articles. Articles 148 to 151, Part V, Chapter V.
• Governing statute. CAG’s (Duties, Powers and Conditions of Service) Act, 1971.
• Tenure. 6 years or 65 years of age, whichever is earlier.
• Removal. Same manner and grounds as a Supreme Court judge (Article 124(4)).
• Salary. Equal to a Supreme Court judge; charged on the Consolidated Fund of India.
• Current incumbent. Sanjay Murthy, sworn in 21 November 2024 as the 15th CAG of India.
• Reports to. President (Union) and Governor (State), who lay them before legislatures.
• Examined by. Public Accounts Committee (PAC), Committee on Public Undertakings (COPU), and Estimates Committee.

Constitutional Scheme — Articles 148 to 151

The CAG of India is created not as an officer of the executive but as a constitutional functionary, with conditions of service designed to protect independence.

Article 148 — Appointment and Conditions

Article 148 provides that there shall be a Comptroller and Auditor General of India appointed by the President under his hand and seal. The CAG holds office for six years or until the age of 65, whichever is earlier, and can resign by writing to the President or be removed in the same manner and on the same grounds as a Supreme Court judge — proved misbehaviour or incapacity, on an address by both Houses of Parliament supported by a special majority. The salary and conditions are determined by Parliament and have been equated with those of a Supreme Court judge, and they cannot be varied to the disadvantage of the incumbent after appointment.

Importantly, the CAG of India is barred from any further office under the Government of India or any State after demitting office. This post-retirement bar is meant to insulate the auditor from the temptation of pleasing the government for a future sinecure.

Article 149 — Duties and Powers

Article 149 vests in the CAG of India such duties and powers in relation to the accounts of the Union, the States, and any other authority or body as may be prescribed by Parliament. The CAG’s (DPC) Act, 1971 fills this in: audit of all expenditure from the Consolidated Fund; audit of all transactions from the Contingency Fund and the Public Account; audit of stores and stock; audit of government companies under the Companies Act; audit of corporations established by law where the statute so requires; and audit of bodies substantially financed from Union or State funds.

Article 150 — Form of Accounts

Article 150 says the accounts of the Union and the States shall be kept in such form as the President may, on the advice of the CAG of India, prescribe. After the 1976 separation of accounts from audit at the Union level, the CAG no longer compiles Union accounts but continues to prescribe the form and to compile and audit accounts of most States.

Article 151 — Audit Reports

Article 151 makes the laying of CAG reports a constitutional obligation. Reports relating to the Union are submitted to the President, who causes them to be laid before each House of Parliament. Reports relating to a State are submitted to the Governor, who causes them to be laid before the State Legislature. There is no power in the President or Governor to withhold a CAG report — but Article 151 prescribes no deadline for laying, a gap that has produced the present controversy.

Appointment of the CAG of India

The CAG of India is appointed by the President. The Constitution does not prescribe a collegium or consultation mechanism; the appointment is in effect made by the Prime Minister and Cabinet, with the President’s seal. This is a structural weakness — unlike the Chief Election Commissioner (now appointed by a panel after the 2023 Act) or Supreme Court judges (appointed through the collegium), the CAG of India is the sole constitutional auditor selected by the executive that the auditor will audit.

The convention has been to draw the CAG of India from the Indian Audit and Accounts Service (IAAS) or, occasionally, from the Indian Administrative Service. Several reform proposals — including those before the Constitution Review Commission of 2002 and a 2013 PIL — have urged a multi-member CAG and a collegium-based appointment, but neither has been adopted.

Duties and Powers of the CAG of India

The CAG’s audit mandate runs across three main verticals.

Financial audit

The CAG of India certifies the Finance Accounts and Appropriation Accounts of the Union and each State. Finance Accounts present receipts and expenditure under the Consolidated Fund, the Contingency Fund, and the Public Account; Appropriation Accounts match expenditure against the grants voted by the legislature. A “qualified” or “adverse” certification is a serious signal that the books do not present a true and fair view of public finances.

Compliance audit

Compliance audit checks whether transactions conform to the Constitution, statutes, and rules made under them, and whether expenditure was incurred with due regularity and propriety. The “regularity” lens picks up unauthorised expenditure; the “propriety” lens — a CAG innovation rooted in the Lloyd–George canons — picks up wasteful or extravagant spending even when technically lawful.

Performance audit

Performance audit (also called value-for-money audit) examines whether a scheme has achieved its objectives economically, efficiently, and effectively. It is the most politically consequential branch of CAG work — the 2G spectrum performance audit (2010), the Coalgate report (2012), and more recent reports on Ayushman Bharat, Dwarka Expressway, and Bharatmala are all performance audits.

The CAG also audits government companies (Section 143(5) of the Companies Act, 2013), conducts supplementary audits of statutory auditors’ work, and audits autonomous bodies substantially financed (75% or more) by Union or State funds.

Audit Reports of the CAG of India

The CAG of India produces three families of reports.

Audit Reports on Financial and Appropriation Accounts

These are the technical certifications under Articles 150 and 151. They are short, formal, and presented alongside the accounts themselves.

Compliance Audit Reports

These flag specific cases of irregular, infructuous, or unauthorised expenditure across ministries and departments. They are sectoral — Defence Services, Railways, Posts and Telecom, Direct Taxes, Indirect Taxes — and are tabled separately.

Performance Audit Reports

These are the headline-grabbing reports. Each takes a scheme or programme — say, Ayushman Bharat Pradhan Mantri Jan Arogya Yojana — and assesses whether public money produced public outcomes. Findings often shape parliamentary debate, court orders, and policy redesign.

The CAG of India and the Public Accounts Committee

A CAG report is technical until the Public Accounts Committee unpacks it. The PAC, drawn from both Houses of Parliament and chaired by an Opposition MP since 1967, examines the CAG’s Union reports paragraph by paragraph, summons secretaries to testify, and produces its own reports with recommendations on which the executive must take action. The CAG of India sits as a “friend, philosopher, and guide” to the PAC — attending its meetings, explaining findings, and helping frame queries.

This CAG–PAC partnership is the operating heart of legislative financial accountability in federalism within the Indian constitutional design. State CAG reports flow similarly to State PACs.

Independence Safeguards — and Their Limits

The Constitution builds three walls around the CAG of India: security of tenure, salary on the Consolidated Fund (not voted), and a post-retirement bar on government office. The CAG’s administrative expenditure is also charged on the Consolidated Fund and not subject to a vote.

But there are gaps. Appointment is unilaterally by the executive. The President of India is not bound to lay reports within any deadline. The CAG of India has no contempt powers — agencies can stonewall information. The CAG cannot audit private contractors of public schemes unless the contract gives access. And critically, the CAG does not audit PPP concessionaires directly, even when they receive viability gap funding from the fiscal-deficit-india calculation.

Recent Critiques — Delay in Tabling Reports, 2024-25

The most pointed recent debate concerns the time gap between report submission and laying in Parliament. Press reporting and Opposition questions through 2024-25 highlighted that several performance audits — Ayushman Bharat, Dwarka Expressway, Bharatmala, Air India sale — were prepared by the CAG of India but not laid in Parliament for many months. Critics argue that Article 151 should be amended to mandate a fixed window (say, 30 days from submission), failing which the report should be deemed laid.

Defenders point out that the CAG’s reports continue to be tabled in due course, that some delay is built into the process of executive response gathering before tabling, and that statistically the pace of laying is broadly consistent with previous decades. The debate, however, has revived a recurring theme — that the CAG of India works best when its reports reach Parliament fast and its appointment process is transparent.

CAG of India in the Constitutional Architecture

The CAG of India sits within a wider family of statutory-constitutional-bodies-overview that includes the election-commission-india, the finance-commission-of-india, and the UPSC — each insulated from executive control by tenure, salary, and removal protections so they can perform their watchdog or distributive functions without fear or favour. Of these, the CAG of India is the one whose work most directly touches every department, every scheme, and every rupee.

Frequently Asked Questions