Subject: Indian Polity

The Comptroller and Auditor General (CAG) serves as India's supreme audit institution, deriving its mandate from Article 149 of the Constitution to ensure fiscal accountability and transparency in governance.

Constitutional Framework and Mandate

• The CAG's authority stems from Article 148 which establishes the office as an independent constitutional body with powers to audit accounts of both Union and States.

• The CAG conducts three types of audits:

  • Financial Audit: Examining accuracy of accounts and financial statements.
  • Compliance Audit: Checking adherence to rules and regulations.
  • Performance Audit: Evaluating effectiveness of government programs.

Scope of Policy Implementation Audit

• The CAG's role in policy implementation audit is justified because:
  • It ensures accountability in public spending and implementation efficiency.
  • Helps identify systemic issues in policy execution through outcome-based evaluation.
  • Provides valuable feedback for policy improvements through performance audits.

Jurisdictional Boundaries

• The CAG must maintain balance between:

  • Policy Scrutiny: Examining implementation effectiveness without questioning policy merit.
  • Executive Domain: Respecting government's right to formulate policies while ensuring proper execution.

• Recent developments showcase this balance:

  • The Supreme Court's 2023 notice regarding CAG appointment process demonstrates the need for institutional independence.
  • Parliamentary oversight through the Public Accounts Committee (PAC) ensures CAG reports are properly scrutinized.

Way Forward

• Clear guidelines needed to:
  • Define boundaries between policy formulation and implementation audit.
  • Strengthen CAG's independence in conducting performance audits.
  • Enhance coordination with parliamentary committees.

The CAG's audit of policy implementation, when conducted within constitutional boundaries, strengthens democracy by ensuring accountability and transparency in governance, as evidenced by its crucial role in examining programs like MGNREGA and Direct Benefit Transfers.