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CAG and the Demand for a Neutral Appointment Process

The Comptroller and Auditor-General of India (CAG) plays a crucial role in ensuring transparency and accountability in public finances. Recently, the Supreme Court issued a notice to the Central Government regarding a Public Interest Litigation (PIL) demanding a more neutral process for the appointment of the CAG. The petition raises concerns over potential executive influence on the selection of India’s top audit authority.


Constitutional Provisions Related to CAG

The Constitution of India (Articles 148-151) lays down the provisions regarding the CAG:

  • Appointment: The President of India appoints the CAG by warrant under his hand and seal.

  • Tenure: The CAG holds office for six years or until the age of 65, whichever is earlier.

  • Removal: The CAG can be removed in the same manner as a Supreme Court judge, ensuring security of tenure.

  • Independence: After leaving office, the CAG is not eligible for any further office under the Central or State Government, ensuring impartiality.

  • Salary & Conditions of Service: Determined by Parliament or specified in the Second Schedule of the Constitution.

  • Oath of Office: Administered by the President or an official designated by him.


Powers & Responsibilities of CAG (Article 149)

The CAG plays a pivotal role in ensuring financial accountability in governance:

  1. Auditing Government Accounts: The CAG audits the accounts of the Union, States, and other public bodies.

  2. Examining Government Spending: Ensures that government funds are used effectively and lawfully.

  3. Submitting Audit Reports: Reports are presented to the President or Governors and later tabled in Parliament/State Legislatures.

  4. Uncovering Financial Irregularities: The CAG reports have played a key role in exposing corruption and financial mismanagement.

  5. Role in Public Sector Enterprises: Audits public sector undertakings (PSUs) and ensures transparency.


Why is a Neutral Appointment Process Needed?

The PIL before the Supreme Court demands reforms in the appointment process of the CAG to strengthen its independence. Key concerns include:

  1. Executive Influence: The CAG is appointed by the President, but the selection is often made by the Executive (Council of Ministers), raising concerns about neutrality.

  2. Need for a Collegium System: Experts suggest a collegium-like mechanism, similar to the appointment of judges, to ensure greater transparency.

  3. Global Best Practices: Countries like the UK and Germany follow a parliamentary committee-based appointment to reduce political influence.


Way Forward

  1. Reforming the Appointment Process: A multi-member selection panel involving Parliament, judiciary, and experts can be introduced.

  2. Strengthening Financial Independence: The CAG should have more control over its budget and human resources.

  3. Greater Transparency in Audits: Audit reports should be easily accessible to the public for greater accountability.


UPSC Prelims Question

Consider the following statements regarding the Comptroller and Auditor-General of India (CAG):

  1. The CAG is appointed by the President of India.

  2. The tenure of the CAG is five years or until the age of 65, whichever is earlier.

  3. The CAG can be removed from office in the same manner as a judge of the Supreme Court.

Which of the above statements is/are correct?

(a) 1 and 2 only

(b) 1 and 3 only

(c) 2 and 3 only

(d) 1, 2, and 3


UPSC Mains Question

Q. The Comptroller and Auditor-General (CAG) is a crucial pillar of financial accountability in India. Discuss the need for reforming its appointment process and suggest measures to strengthen its independence.

(GS Paper 2 – Polity & Governance)


 
 
 

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