Comptroller and Auditor General of India

Scope of Audits

Audit of government accounts (including the accounts of the state governments) in India is entrusted to the CAG of India who is empowered to audit all expenditure from the Consolidated Fund of the union or state governments, whether incurred within India or outside, all revenue into the Consolidated Funds and all transactions relating to the Public Account and the Contingency Funds of the Union and the states. Specifically, audits include:

• Transactions relating to debt, deposits, remittances, Trading, and manufacturing
• Profit and loss accounts and balance sheets kept under the order of the President or Governors
• Receipts and stock accounts. CAG also audits the books of accounts of the government companies as per Companies Act.

In addition, the CAG also executes performance and compliance audits of various functions and departments of the government. Recently, the CAG as a part of thematic review on "Introduction of New Trains" is deputing an auditors' team on selected trains, originating and terminating at Sealdah and Howrah stations, to assess the necessity of their introduction. In a path-breaking judgement, the Supreme Court of India ruled that the CAG General could audit private firms in revenue-share deals with government.

The CAG has been a regular member of the United Nations' Panel of External Auditors, and has previously served as the chairman of its board of auditors, after being elected in 2011. The CAG is at present serving as external auditor of two UN organisations:

• Food and Agriculture Organisation (FAO) of the United Nations
• World Health Organisation (WHO)

Suggested Reforms

As the CAG, Mr. Vinod Rai was constantly in the limelight for its reports exposing mega corruption, particularly in 2G spectrum case, Commonwealth Games scam, Coal mine allocation scam and others. In November-2009, then as CAG, he requested the government to amend the 1971 Audit Act to bring all private-public partnerships (PPPs), Panchayati Raj Institutions (transl. Rural Local Bodies (RLBs)) and societies getting government funds within the ambit of the CAG. The amendment further proposes to enhance CAG's powers to access information under the Audit Act. In the past, almost 30% of the documents demanded by CAG officials have been denied to them. The PPP model has become a favourite mode of executing big infrastructure projects worth millions of rupees and these projects may or may not come under the audit purview of the CAG, depending on sources of funds and the nature of revenue sharing agreements between the government and the private entities. As of 2013, it is estimated that 60 percent of government spending does not come under the scrutiny of the CAG.

In June-2012, Lal Krishna Advani, a veteran Indian politician and former Deputy Prime Minister of India (as well as former Leader of the Opposition in Indian Parliament), suggested that CAG's appointment should be made by a bipartisan collegium consisting of the prime minister, the Chief Justice of India, the Law Minister and the Leaders of the Opposition in the House of the People and the Council of States. Subsequently, M Karunanidhi, the head of Dravida Munnetra Kazhagam (DMK) party and five times Chief Minister of the State of Tamil Nadu, supported the suggestion. Advani made this demand to remove any impression of bias or lack of transparency and fairness because, according to him, the current system was open to "manipulation and partisanship". Similar demand was made by many former CEC's such as B B Tandon, N Gopalaswamy and S Y Quraishi; however, the government did not seem too keen.

CPI MP Gurudas Dasgupta wrote a letter to the PM and demand CAG be appointed by the collegium of consisting the PM, the CJI and the leader of the opposition in Lok Sabha but the PM declined. Former CAG V. K. Shunglu has suggested in its CWG scam report that CAG be made a multi-member body.

PMO Minister V. Narayanasamy in his interview with PTI said Government is considering the Shunglu panel report but PM and Finance Minister declined it. Later V. Narayanasamy said he misquoted but PTI reaffirmed it.

In November-2025, the CAG announced that two centralised specialised cadres would be created within the Indian Audit and Accounts Department. One cadre would be for audit of Revenue and the other for audit of Expenditure. It is expected to be operationalised by January-2026. It is expected that having specialised cadres for Revenue and Expenditure audits would help deepen the domain expertise in the respective audits.

Prominent Audit Reports

2G Spectrum Allocation

A CAG report on issue of Licences and Allocation of 2G Spectrum resulted in a huge controversy. The report estimated that there was a presumptive loss of ₹176,600 crore (US$18 billion) by the United Progressive Alliance (UPA) government. In a chargesheet filed on 02-April-2011 by the investigating agency Central Bureau of Investigation (CBI), the agency pegged the loss at ₹31,000 crore (US$3.2 billion)

All the speculations of profit, loss and no-loss were put to rest on 02-February-2012 when the Supreme Court of India on a public interest litigation (PIL) declared allotment of spectrum as "unconstitutional and arbitrary" and quashed all the 122 licenses issued in 2008 during tenure of A. Raja (then minister for communications & IT in the UPA government) the main accused. The court further said that A. Raja "wanted to favour some companies at the cost of the public exchequer" and "virtually gifted away important national asset".

Revenue loss calculation was further established on 03-August-2012 when according to the directions of the Supreme Court, Union of India revised the reserve price for 2G spectrum to ₹14,000 crore (US$1.5 billion).

However, the special court in New Delhi acquitted all accused in the 2G spectrum case including prime accused A Raja and Kanimozhi on 21-December-2017, the verdict was based on the fact that CBI could not find any evidence against the accused in those 7 years. Per the judgement, "Some people created a scam by artfully arranging a few selected facts and exaggerating things beyond recognition to astronomical levels."

Coal Mine Allocation

A 2012 CAG report on coal mine allocation received massive media and political reaction as well as public outrage. During the 2012 monsoon session of the Parliament, the BJP protested the government's handling of the issue demanding the resignation of the prime minister and refused to have a debate in the Parliament. The deadlock resulted in Parliament functioning only seven of the twenty days of the session.

The CAG report criticised the government by saying it had the authority to allocate coal blocks by a process of competitive bidding, but chose not to. As a result, both public sector enterprises (PSEs) and private firms paid less than they might have otherwise. In its draft report in March, the CAG estimated that the "windfall gain" to the allocatees was ₹1,067,300 crore (US$110 billion). The CAG Final Report tabled in Parliament put the figure at ₹185,600 crore (US$19 billion)

While the initial CAG report suggested that coal blocks could have been allocated more efficiently, resulting in more revenue to the government, at no point did it suggest that corruption was involved in the allocation of coal. Over the course of 2012, however, the question of corruption came to dominate the discussion. In response to a complaint by the BJP, the Central Vigilance Commission (CVC) directed the CBI to investigate the matter. The CBI named a dozen Indian firms in a First Information Report (FIR), the first step in a criminal investigation. These FIRs accuse them of overstating their net worth, failing to disclose prior coal allocations, and hoarding rather than developing coal allocations. The CBI officials investigating the case have speculated that bribery may be involved.

Fodder Scam

The scandal was first exposed due to the CAG report in the matter in December-1995. The report alleged of fraudulent withdrawal of government funds worth ₹950 crore (US$99 million) in the Bihar animal husbandry department against non-existent supplies of fodder and medicines. Subsequently, based on Patna High Court's orders, CBI investigated the case and registered as many as 63 cases. Many accused have been convicted while many cases are still under trial.

Krishna-Godavari (KG) D-6 Gas Block

The oil ministry imposed a fine of ₹7,000 crores on Mr. Mukesh Ambani's company for the sharp drop in production of gas and violations mentioned in CAG's 2011 report. Oil ministry did not approve company's US$7.2 billion stake in deal with BP. So Jaipal Reddy known for his honesty was shifted from oil ministry to the Science and Technology ministry owing to pressure from Reliance group of Industries. RIL allowed the CAG to begin the audit in April this year after stalling it for a year. But unresolved issues could stall audit of KG Basin again. Then Government appointed Defence Secretary Shashikant Sharma as new CAG to audit KG Basin, said Prashant Bhushan. In KG D-6, most of the cost had been recovered by the private player and the increase in price would only go as profit. About 90% of receipts from K-G D-6 were so far booked as expenditure and in the remaining 10%, only 1% was paid to the government and rest 9% went to the operator as profit.

List of CAGs of India

This is a list of all CAGs of India from British India to present Union of India:

Auditor General of British India (1860–1947) and Dominion of India (1947–1950)

Comptroller and Auditor General of the Union of India (1950–present)