APPOINTMENT OF CAGI: POLITY
NEWS: SC to examine plea to trim Centre’s ‘absolute’ control over CAG appointment
WHAT’S IN THE NEWS?
The Supreme Court is reviewing a plea challenging the Centre's exclusive authority to appoint the Comptroller and Auditor General (CAG), raising concerns about its independence. Proposals for reforms include creating an independent selection committee and ensuring timely audits to strengthen the CAG's role in financial accountability.
The Plea Regarding the Appointment of CAG
• The Supreme Court is currently reviewing a plea challenging the exclusive authority of the Centre, through the President, to appoint the Comptroller and Auditor General (CAG) of India.
• The challenge has arisen amid concerns about the independence of the CAG and its role in ensuring financial accountability.
Role and Responsibilities of the CAG
• The CAG holds a crucial position in overseeing the financial accountability of the Union, State governments, and Panchayati Raj institutions in India.
• The CAG audits government accounts, ensuring transparency in public spending and identifying financial irregularities.
Constitutional Provisions Related to the CAG
• Article 148: The CAG is appointed by the President of India. Once appointed, the CAG can only be removed in the same manner as a Supreme Court judge (through impeachment).
• The salary, allowances, and conditions of service of the CAG are set by Parliament, but from consolidated fund of India and they cannot be altered to the disadvantage of the CAG once appointed.
• The CAG is prohibited from holding any other office once they leave the position of CAG.
• Article 149: The CAG is responsible for auditing the accounts of both the Union and State governments as prescribed by law.
• The role of the CAG continues the duties previously held by the Auditor-General of India before the Constitution came into effect.
• Article 150: The form in which the accounts of the Union and States are maintained is decided by the President, based on advice from the CAG.
• Article 151: The CAG’s audit reports on Union accounts are submitted to the President, who ensures they are presented to Parliament. For state accounts, the reports are submitted to the respective Governor and laid before the state legislature.
• Article 279: The CAG certifies the "net proceeds" of taxes and duties, and its certificate is considered final.
Recent Issues and Concerns
• There is growing concern that the executive-controlled appointment process of the CAG may undermine the independence of the institution.
• The government may exert undue influence on the CAG, compromising its role as an impartial and objective financial watchdog.
• Criticisms have emerged regarding the CAG’s recent performance, including delays in audits and a decline in audits of the Union government.
• Allegations of corruption in the recruitment process of CAG staff have also surfaced, casting doubts on its operational integrity.
• Recent CAG reports have exposed irregularities in public fund management, such as issues related to Delhi’s excise policy and Uttarakhand’s Compensatory Afforestation Fund Management.
• These reports have led to friction between the CAG and the executive, particularly over the timing and presentation of audit findings, raising concerns over the transparency of the process.
Proposed Reforms to Strengthen the CAG
• To address the tensions between the CAG and the executive, several reform proposals have been suggested:
Establishing a separate, independent selection committee for the appointment of the CAG.
Setting time limits for the presentation of audit reports to ensure timely accountability.
Reforming the auditing structure to include a multi-member body, which could enhance the quality and fairness of audits.
• Critics have also proposed creating separate auditing bodies for states, similar to systems in federal countries like Australia and the US, to strengthen accountability at the state level.
• Some suggest that the President should appoint the CAG in consultation with a non-partisan selection committee, comprising the Prime Minister, the Leader of the Opposition, and the Chief Justice of India. This could ensure a more balanced and independent process.
Conclusion
• The CAG is a vital institution in India’s democratic framework, ensuring transparency and accountability in government financial matters.
• Addressing the existing challenges and ensuring the independence of the CAG will require a balanced approach that preserves its constitutional mandate while also safeguarding its effectiveness in fulfilling its duties.
Source: https://www.thehindu.com/news/national/supreme-court-seeks-centres-reply-on-pil-challenging-current-cag-appointment-procedure/article69339588.ece