Describes the legal environment of the Comptroller & Auditor General of India in the light of attacks upon him by senior Indian politicians and concludes that the CAG of India merits greater powers.

1. CAG of India: A Tragic Hero in Eternal Anarchy
In the last few months, the institution of the Comptroller and Auditor General (CAG)
of India has been pilloried by senior politicians in a cathartic nation, best expressed in the
immortal words of John Milton – “A dark illimitable ocean, without bound, without
dimension, where length, breadth, and height, and time, and place, are lost: where eldest
Night And Chaos, ancestors of Nature, hold Eternal anarchy, amidst the noise of endless
wars, and by confusion stand.” Does such pillorying of an already debilitated body have
constitutional sanction? Is it based on educated opinion? Does it augur well for our
democracy?
Article 148 of our Constitution provides for CAG with the legal status of a Supreme
Court judge. The CAG is sworn by Article 148(3), like a Supreme Court judge by Article 124
(6), to uphold the integrity of the nation and is ineligible, by Article 148(4), for further office
under the Government (i.e. rank of a Secretary and below) after retiring as CAG. In order to
preserve his independence, the CAG‟s expenses are charged (without vote) to the
Consolidated Fund of India. The CAG can be removed from office only under Article 124
(4), like a Supreme Court judge. The CAG‟s terms and conditions of service have been
determined by Parliament by Article 149 of our Constitution in the shape of the CAG‟s
(Duties Powers and Conditions of Service) Act, 1971 (DPC Act). Evidently the founding
fathers of our Constitution viewed CAG as a key preserver and triumvir of India‟s
democracy, sworn to uphold the integrity of the nation and therefore worthy of constitutional
protection. Therefore, as Edward Gibbon said, “their persons were sacred and inviolable.
Their force was suited rather for opposition than for action.” Unfortunately, the DPC Act, the
product of an authoritarian majority in 1971, legislated otherwise. A deliberate executive-
sponsored legislative disconnect from the lofty ideals of the Constitution that militates against
fundamental checks and balances and separation of powers enshrined in our democracy.
Consequently, unlike the Supreme Court under Article 129, the CAG‟s powers are
severely circumscribed by Sections 14, 15, 19(3) and 20(1) of the DPC Act that curtails
CAG‟s mandate to authorities substantially funded by governments (i.e. 51% or more of their
annual expenditure). Without prior government sanction, the CAG is precluded by rule/law
from auditing all other bodies, such as PPP partners, private contractors, regulators, NGOs,
state local bodies (such as municipal bodies and panchayats) even as these agencies receive
large government funding or involve exploitation of vast national natural resources. For
instance, by Section 15(2) of the DPC Act, the CAG can be deprived of his audit mandate
where an organization‟s Act is tailor made to specifically nominate an agency other than the
CAG for its audit, even though government has a large shareholding or interest in its share
capital or gives large annual budgetary support.
In fact, organizations even have the right under these sections to represent against
audit by the CAG. The Standing Committee of Public Enterprises (SCOPE) has, over the
years, vociferously protested against CAG‟s audit for mucking their annual accounts,
sometimes even supported by a previous Finance Minister. Governments have not hesitated
in taking advantage of Section 15(2) and excluded all major financial institutions from audit
by CAG. This is in marked contrast to Article 140 of the Constitution that specifically
authorizes Parliament to confer upon the Supreme Court such supplemental powers not
inconsistent with any of the provisions of this Constitution, unlike the DPC Act, as may
appear to be necessary or desirable for the purpose of enabling the Court more effectively to
exercise the jurisdiction conferred upon it by or under the Constitution.
1

2. The CAG is also haunted by the specter of finding his reports hitting the junk pile of
government records in the absence of any provision such as Article 141 that confers power to
pass any decree and make any order for the purpose of securing the attendance of any person,
the discovery or production of any documents, or the investigation or punishment of any
contempt of itself on the Supreme Court. Or Article 144 that requires all authorities, civil and
judicial, in the territory of India to act in aid of the Supreme Court. All the CAG can fall back
upon is Section 18 of the DPC Act that neither provides any time limits for production of
documents and replies, nor any contempt proceedings for their denial. Similarly, God‟s
lifetime is the limit within which CAG‟s Reports are required to be presented to the
Legislature after submission to the President or Governor. Neither does CAG have the right
to release these Reports in the public domain if they are not presented in the legislature within
a month of their submission by CAG nor can he enforce any of his findings by decree, akin to
Parliament‟s Public Accounts Committee. Indeed CAG is a prosecutor with a disabling law,
judge without the power to sentence and a litigant with no right of appeal – a willful
subversion of the Constitution by the DPC Act.
Again, unlike the Supreme Court under Article 146 of the Constitution which is
empowered to recruit its own personnel and determine their terms and conditions of service,
Article 148 (5) of the Constitution states that the conditions of service of persons serving in
the Indian Audit & Accounts Department (IA&AD) and the administrative powers of the
CAG shall be such as may be prescribed by rules made by the President after consultation
with the CAG, akin to the Supreme Court. However, the Court‟s constitutional locus standi
being eons ahead of the CAG‟s, the executive can play no mischief. Even though the
Constitution makes no distinction between the IA&AD (a 50000-strong public entity), the
Government of India has struck a deliberate and invidious distinction between the CAG and
his executive department, separating the kettle from the fire. While the CAG‟s budget is not
subject to Parliamentary vote, the IA&AD has to face regular budget cuts and personnel
recruitment bans. Neither is the CAG permitted to recover the IA&AD‟s establishment costs
from government programmes nor does he have the authority to directly hire domain
specialists and/or support staff on his own.
Where the Constitution raises CAG to a lofty pedestal, the DPC Act subversively
toasts him as a tragic modern-day last Mughal Emperor, Bahadur Shah Zafar. Section 16 of
the CAG‟s (DPC) Act states that it shall be the duty of the CAG to audit all receipts which
are payable into the Consolidated Fund of India, each State and Union territory having a
Legislative Assembly to satisfy himself that the rules and procedures in that behalf are
designed to secure an effective check on the assessment, collection and proper allocation of
revenue and are being duly observed and to make for this purpose such examination of the
accounts as he thinks fit and report thereon. In a similar vein, Section 13 (a) of the CAG‟s
(DPC) Act states that it shall be the duty of the CAG to audit all expenditure from the
Consolidated Fund of India and of each State and of each Union territory having a Legislative
Assembly and to ascertain whether the moneys shown in the accounts as having been
disbursed were legally available for and applicable to the service or purpose to which they
have been applied or charged and whether the expenditure conforms to the authority which
governs it. Then, why is CAG pilloried for his expenditure reports on the MNREGA or Air
India when the DPC Act does not define even the term „public moneys‟? Or why is CAG
pilloried when he comments on receipts of public moneys from 2G or Reliance-KG?
The CAG‟s mandate is light years longer and wider than that of the Supreme Court.
While the CAG has the status of a judge of the Supreme Court, yet the wherewithal provided
to him to ensure accountability hobbles his efforts, indeed lays him on a stretcher. In the 2G
case, CAG commented on faulty implementation of policy, clearly distinct from policy-
2

3. making as made out recently by senior politicians, as CAG seems to have done in the recent
Reliance-KG case. Earlier, CAG has commented, inter alia, on improper valuation of assets
of PSUs being disinvested and telecom licenses issued during the NDA regime. Oddly
enough, CAG‟s previous reports are now being used to pillory him. The present political
logic seems to state that if CAG pointed out lapses in the policy process of issue of telecom
licenses in 1999-2000, then this is the benchmark for further malfeasance that shall proceed
by extrapolating the past onto the future. So why should CAG object again?
When CAG has not questioned the wisdom of policy, even as the Constitution and the
DPC Act empowers him, criticism of the CAG is certainly rooted in uneducated opinion and
deliberate suppression/obfuscation of facts with its genesis in deep-rooted bureaucratic and
political antipathy to accountability. This is when CAG is only a second level accountability
check post to government Ministries/departments, Secretaries of which are the Principal
Accounting Authority (and Internal Auditor), the primary custodians of our national wealth.
The CAG‟s audit is not a substitute for administrative ennui but certainly is for bad policy
that coverts good public moneys into shadowy investments in personal fiefdoms. Poor
implementation obviously casts a shadow on the wisdom of policy and concomitant and
encourages recurrent malfeasance. Hence CAG is pilloried when, as Gibbon famously
declared, “They (read CAG) were instituted to defend the oppressed, to pardon offences, to
arraign the enemies of the people, and, when they judged it necessary, to stop, by a single
word, the whole machine of government.” In the brouhaha over the Lokpal the CAG is
forgotten while fresh efforts are made to create another feel good and populist but toothless
white-collar employment exchange, another layer of bureaucracy.
Notwithstanding the severest limitations imposed upon him by his legal and political
environs, CAG still creditably survives in defense of accountability, a knight in shining
armor, standing firm in an ocean of fallen Roman triumvirs in this hapless nation. The unique
combination of knowledge, integrity, commitment and fearlessness of successive CAGs,
officers of the Indian Audit and Accounts Service, their Audit Officers and other personnel
that has preserved India‟s last pillar of democracy is exemplary and worthy of replication in a
nation sunk in the depths of Milton‟s “eternal anarchy.” Demeaning CAG demeans our
democracy and greatly widens the alienation of the rulers from the ruled.
Four decades later, the DPC Act has evidently outlived its utility as models of
governance have dramatically changed and introduced many dubious non-state players and
unprecedented white-collared crime has overtaken this noble nation in the midst of an ever-
widening gap between the rich and the poor. Foreigners ask why India is poor since it can
afford loot of billions of dollars of taxpayers‟ moneys, even as we nurse delusions of
grandeur as a powerhouse of the new century with China. Will some one at least speak up for
the CAG and the proposed new Public Audit Bill for this venerable institution on its 150th
anniversary, rather than concentrate on the Lokpal alone? If we fail, as Cicero famously
remarked, “It was due to our own moral failure and not to any accident of chance that, while
retaining the name, we have lost the reality of a republic.”
The author is Director General of Audit under the Comptroller and Auditor
General of India. The views are personal and do not reflect official policy or
pronouncement.
3