Audit and accountability: the CAG, Public Accounts and budget oversight

Budget approval is only half of financial accountability; the other half is audit after spending. The Comptroller and Auditor General of India, or CAG, is a constitutional authority under Article 148, appointed by the President, who audits the accounts of the Union and states and reports to the President and Governors, who lay the reports before Parliament and state legislatures. The CAG's independence, including security of tenure and salary charged on the Consolidated Fund, is designed to protect audit from executive pressure.

The CAG conducts financial audit, checking whether accounts are accurate, compliance audit, checking whether spending followed law and rules, and performance audit, assessing whether programmes achieved their objectives economically and efficiently. Its reports have exposed irregularities, cost overruns and weak implementation in areas from defence procurement to welfare schemes, and they provide the factual basis for legislative scrutiny. The CAG does not punish officials or recover money itself; its power lies in public reporting and in the follow-up by legislatures and the executive.

Legislative follow-up runs mainly through the Public Accounts Committee, a parliamentary committee that examines CAG reports and government replies, known as action taken notes, and through the Estimates Committee and department-related standing committees. The effectiveness of this chain varies: reports can be delayed, action taken notes can be perfunctory, and media attention often focuses on headline figures rather than systemic recommendations. Social audit, in which beneficiaries verify muster rolls, works and payments, as institutionalised for rural employment programmes, complements formal audit by bringing local knowledge to bear on local spending.

For civil studies, audit is a test of democratic control over money. Without independent audit and legislative follow-up, budgets become promises without verification. With them, even powerful departments must explain delays, cost increases and failures. The limits of audit also matter: auditors judge regularity and performance, but elected governments retain the right to choose policies that auditors may consider inefficient, and that boundary between audit and policy choice must be respected for audit to retain credibility.