UPSC Mains Answer: Exercise of CAG’s powers in relation to the accounts of the Union and the States is derived from Article 149 of the Indian Constitution. Discuss whether audit of the Government’s policy implementation could amount to overstepping its own (CAG) jurisdiction.

Difficulty Level: Hard

Sub-category: Indian Polity and Governance - Constitutional Bodies

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The Comptroller and Auditor General (CAG) of India, established under Article 148 of the Constitution, derives its audit powers concerning the accounts of the Union and States from Article 149. This constitutional mandate primarily empowers the CAG to audit the receipts and expenditures of the government to ensure financial propriety, accountability, and transparency. However, the question of whether the CAG’s audit of government policy implementation oversteps its jurisdiction has been a subject of debate.
Historically, the CAG’s role was confined to financial and compliance audits, ensuring that public funds were spent as authorized by the legislature. Over time, the scope of audit has expanded to include performance and efficiency audits, which inherently involve an assessment of policy execution. For instance, the CAG’s reports on spectrum allocation, coal block auctions, and public-private partnerships have scrutinized not just financial irregularities but also the efficacy and fairness of policy implementation. While this expansion enhances accountability, critics argue that it encroaches upon the executive’s domain, as policy formulation and implementation are inherently executive functions.
The Supreme Court, in cases like Association of Unified Tele Services Providers vs. Union of India (2014), has upheld the CAG’s authority to conduct performance audits, emphasizing that its role is not merely to check arithmetic accuracy but to ensure that public resources are utilized efficiently and effectively. However, the CAG must strike a balance—its audits should not venture into questioning the merits of policy decisions, which are the prerogative of the elected government. Instead, it should focus on whether policies were implemented in a transparent, economical, and lawful manner.
In conclusion, while the CAG’s audit of policy implementation is a necessary tool for ensuring accountability, it must operate within the constitutional boundaries. The CAG should avoid substituting its judgment for that of the executive, confining itself to evaluating the implementation process rather than the policy’s intrinsic wisdom. This approach aligns with the principles of separation of powers and democratic governance.