COMPTROLLER AND AUDITOR GENERAL OF INDIA

The Comptroller and Auditor General (CAG) of India is an authority established by the Constitution of India under Chapter V who audits all receipts and expenditure of the Government of India and the state governments including those of bodies and authorities substantially financed by the government. The CAG is also the external auditor of government owned companies. The reports of the CAG are taken into consideration by the Public Accounts Committees which are special committees in the Parliament of India and the state legislatures. The CAG is also the head of the Indian Audit and Accounts Service which has over 58000 employees across the country.

The CAG is ranked 9th and enjoys the same status as a judge of Supreme Court of India in Indian order of precedence. The current CAG of India is Shashi Kant Sharma, who was appointed on 23 May 2013. He is the 12th CAG of India.

Constitutional Provisions

Article 148: Comptroller and Auditor-General of India

1)    There shall be a Comptroller and Auditor General of India who shall be appointed by the President by warrant under his hand and seal and shall only be removed from office in like manner and on like grounds as a Judge of the Supreme Court.

2)    Every person appointed to be the Comptroller and Auditor General of India shall, before he enters upon his office, make and subscribe before the President or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.

3)    The salary and other conditions of service of the Comptroller and Auditor General shall be such as may be determined by Parliament by law and, until they are so determined, shall be as specified in the Second Schedule:

Provided that neither the salary of a Comptroller and Auditor-General nor his rights in respect of leave of absence, pension or age of retirement shall be varied to his disadvantage after his appointment.

4)    The Comptroller and Auditor General shall not be eligible for further office either under the Government of India or under the Government of any State after he has ceased to hold his office.

5)    Subject to the provisions of this Constitution and of any law made by parliament, the conditions of service of persons serving in the Indian Audit and Accounts Department and the administrative powers of the Comptroller and Auditor-General shall be such as may be prescribed by rules made by the President after consultation with the Comptroller and Auditor-General.

6)    The administrative expenses of the office of the Comptroller and Auditor General including all salaries, allowances and pensions payable to or in respect of persons serving in that office, shall be charged upon the Consolidated Fund of India.

Article 149: Duties and Powers of the Comptroller and Auditor General

The Comptroller and Auditor General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States as were conferred on or exercisable by the Auditor General of India immediately before the commencement of this Constitution in relation to the accounts of the Dominion of India and of the provinces respectively.

Article 150: Form of accounts of the Union and of the States

The accounts of the Union and of the States shall be kept in such form as the President may  on the advice of the Comptroller and Auditor-General of India, prescribe.

Article 151: Audit Reports

1)    The reports of the Comptroller and Auditor General of India relating to the accounts of the Union shall be submitted to the president  who shall cause them to be laid before each House of Parliament.

2)    The reports of the Comptroller and Auditor General of India relating to the accounts of a State shall be submitted to the Governor of the State  who shall cause them to be laid before the Legislature of the State.

 

List of Comptroller and Auditors General of India

No.	Comptroller and Auditor General of India	Year tenure began	Year tenure ended
1	V. Narahari Rao	1948	1954
2	A. K. Chanda	1954	1960
3	A. K. Roy	1960	1966
4	S. Ranganathan	1966	1972
5	A. Bakshi	1972	1978
6	Gian Prakash	1978	1984
7	T. N. Chaturvedi	1984	1990
8	C. G. Somiah	1990	1996
9	V. K. Shunglu	1996	2002
10	VN Kaul	2002	2008
11	Vinod Rai	2008	2013
12	Shashi Kant Sharma	2013	Incumbent

INTERIM BUDGET & VOTE ON ACCOUNT

Finance minister P. Chidambaram will present the interim budget for the financial year 2014-15 on 17 February. Since the country will go for Lok Sabha polls in April-May, which will lead to the formation of a new government at the Centre, the usual practice is that the incumbent does not make changes to the tax laws when its tenure is about to end. This allows the new government in office to make the amendments for the year, if necessary.

What is it?

• Interim budget is basically a vote-on-account that authorizes the government to carry out expenditure on different heads for a certain part of the financial year.
• Since the government of the day will not be presenting the budget for the full year, it will need funds in the next financial year (beginning April) to carry out its functions till the time a new government is formed and then gets the budget passed. Thus, the need for an interim budget.
• As per the law, it is necessary for the central government to have Parliament’s approval to raise tax revenue or incur expenditure. Article 265 of the Indian Constitution, for instance, says, “No tax shall be levied or collected except by authority of law.” Similarly, article 266 talks about the conditions for expenditure.

According to a news report by the Press Trust of India, Chidambaram was quoted as saying, “We can make any proposal short of amending any law. We cannot propose amendments to the Income-tax Act, Customs Act or the Excise Act. But any proposal short of amending a law can be made. We can also outline vision for the future.”

In the past two instances of when interim budgets were presented (2004-05 and 2009-10), the government of the day sought the nod of Parliament for carrying out expenditure in the first four months of the financial year.

What to expect

Although the government will not be making any changes in the tax laws, the finance minister may use this opportunity to highlight the achievements of his government and the progress made in different areas over the years.

He may also choose to highlight the policy direction for the future if the government comes back to power. Meanwhile, households and businesses will now be focusing on the outcome of the general elections to get a sense of possible changes in tax laws that will have an effect on their economic life. Expect the full budget to be presented by the new government sometime in July this year.

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Going into the technicalities between Interim Budget and Vote -on-Account ...!

Are a vote-on-account and an interim Budget the same?

No. While a vote-on-account deals only with the expenditure side of the government's budget, an interim Budget is a complete set of accounts, including both expenditure and receipts.

So what is a full Budget?

The Budget is a statement of the financial position of an administration for a definite period of time based on estimates of expenditures during the period and proposals for financing them. A full budget thus spells out both the manner in which the money is to be spent and how it is to be raised.

Why a vote-on-account and not an interim Budget?

A caretaker government typically opts for a vote-on-account, as it is regarded improper for an outgoing government to impose on its successor changes that may or may not be acceptable to the incoming government.

Can a caretaker government not present a full Budget?

• Yes it can. Since the concept of 'caretaker government' does not exist in the Indian Constitution, legally there is no distinction between caretaker government and a normal one.
• Technically, it is not necessary for a government to present a vote-on-account in an election year. But a full Budget just before the elections makes a mockery of the whole exercise.

 

Can the finance minister make policy statements while presenting the vote-on-account?

• Barring any announcement on taxation, the finance minister's speech before seeking Parliament's approval of the vote-on-account can contain his intentions on economic policy.
• When former finance minister Yashwant Sinha presented the vote-on account in 1991, he announced the Chandra Shekhar government's plan to divest government equity in public sector undertakings.

 

For how long can a vote-on-account be in force?

• Normally, the vote-on-account is taken for two months only. But during election year or when it is anticipated that the main Demands and Appropriation Bill will take longer time than two months, the vote-on-account may be for a period extending two months.
• Typically this period does not exceed six months, as that is the maximum gap possible between two sittings of the Parliament.
• Normally a vote-on-account is in operation till the full Budget is passed.