CAG India
Key Concepts
| # | Concept | Explanation |
|---|---|---|
| 1 | Constitutional Body | CAG is the Supreme Audit Institution (SAI) of India; appointment & powers flow directly from Art. 148–151. |
| 2 | Appointment & Term | Appointed by President under his hand & seal; 6-yr term or up to 65 yrs age, whichever earlier; removal same as SC judge (Art. 148). |
| 3 | Audit Mandate | Audits all expenditure from Consolidated Fund of India, States & UTs; also audits receipts & accounts of autonomous bodies (DRDO, ISRO, RBI, PSUs). |
| 4 | Three-Tier Audit | 1. Compliance audit (rules & laws), 2. Performance/Value-for-money audit, 3. IT & forensic audit. |
| 5 | Reports | Three main reports—Appropriation, Finance & Compliance; laid before Parliament/State legislature; PAC examines them. |
| 6 | No Executive Control | CAG is outside the control of the executive; cannot be asked to audit on the dictates of the government. |
| 7 | Audit Boards | Introduced in 1960s; multi-disciplinary teams for PSU audits; reduces outside consultancy cost. |
| 8 | International Link | CAG is ex-officio member of UN Board of Auditors (only 3 members world-wide) and INTOSAI. |
15 Practice MCQs
1. Who audits the accounts of the Reserve Bank of India?
**A.** RBI itself through internal audit**B.** CAG under the RBI Act
**C.** A private auditor appointed by RBI Board
**D.** SEBI
**Answer:** B. CAG audits RBI under Sec. 17(2) of RBI Act—external statutory audit.
**Trick:** “CAG audits money-maker” → RBI prints money → CAG audits it.
**Tag:** Audit mandate
2. The CAG of India is appointed by:
**A.** Prime Minister**B.** President
**C.** Finance Minister
**D.** Parliament
**Answer:** B. Art. 148(1) – President under his hand & seal.
**Trick:** “CAP” – CAG → Appointed → President.
**Tag:** Appointment
3. CAG can be removed from office on the same grounds and manner as:
**A.** Attorney-General for India**B.** Supreme Court Judge
**C.** Governor
**D.** UPSC Chairman
**Answer:** B. Art. 148(2) – removal only by President on address of Parliament for proved misbehaviour/incapacity.
**Tag:** Removal
4. Which of the following is NOT audited by CAG?
**A.** Contingency Fund of India**B.** Public Accounts of States
**C.** Municipal Corporation of Delhi
**D.** Reliance Industries Limited
**Answer:** D. RIL is a private company; CAG audits only govt. money.
**Trick:** “CAG audits govt purse, not private purse.”
**Tag:** Audit scope
5. The maximum tenure of CAG is:
**A.** 5 years or 60 yrs**B.** 6 years or 65 yrs
**C.** Till age 62 yrs
**D.** Life tenure
**Answer:** B. 6 years or 65 years, whichever earlier.
**Tag:** Tenure
6. CAG submits Appropriation Accounts to:
**A.** President**B.** Parliament
**C.** Public Accounts Committee
**D.** Finance Minister
**Answer:** B. Reports are laid before Parliament; PAC only examines them.
**Tag:** Reports
7. The first CAG of independent India was:
**A.** V. Narahari Rao**B.** A. K. Chanda
**C.** C. G. Somiah
**D.** V. K. Shunglu
**Answer:** A. V. Narahari Rao (1948-54).
**Trick:** “First VNR – Very Nice Rao.”
**Tag:** Firsts
8. CAG is an ex-officio member of which UN body?
**A.** UNSC**B.** UN Board of Auditors
**C.** ECOSOC
**D.** IMF Board
**Answer:** B. UN Board of Auditors (3 members).
**Tag:** International
9. The concept of “Performance Audit” was introduced in India by:
**A.** Morarji Desai**B.** CAG’s office in 1960s
**C.** Planning Commission
**D.** Administrative Reforms Commission
**Answer:** B. CAG pioneered it in 1960s to judge economy, efficiency & effectiveness.
**Tag:** Audit types
10. Which committee recommended that CAG should audit PPP projects?
**A.** N. N. Vohra Committee**B.** Vinod Rai Committee
**C.** Ashok Chawla Committee
**D.** VK Shunglu Committee
**Answer:** D. Shunglu Panel 2011 – on Commonwealth Games & PPP audit.
**Tag:** Committees
11. CAG’s reports are examined by:
**A.** Estimates Committee**B.** Public Accounts Committee
**C.** Standing Committee on Finance
**D.** Committee on Public Undertakings
**Answer:** B. PAC at Centre & State levels.
**Tag:** PAC
12. Which article deals with the duties & powers of CAG?
**A.** Art. 149**B.** Art. 148
**C.** Art. 150
**D.** Art. 279
**Answer:** A. Art. 149 – Parliament prescribes duties & powers.
**Tag:** Articles
13. CAG audits the accounts of which of the following PSUs without any threshold?
**A.** ONGC**B.** NTPC
**C.** Both A & B
**D.** None – threshold is 50% govt equity
**Answer:** C. Govt holding any % → CAG can audit; no minimum equity bar.
**Tag:** PSU audit
14. The CAG is not eligible for any further appointment:
**A.** Under Government of India or any State**B.** In World Bank
**C.** In UN
**D.** In private sector
**Answer:** A. Art. 148(4) – complete bar on govt jobs post-retirement.
**Tag:** Post-retirement
15. Match: 1. Appropriation Accounts – P; 2. Finance Accounts – Q; 3. Compliance Audit – R
**P.** Whether money spent as voted; **Q.** Complete financial position; **R.** Whether rules followed**A.** 1-P, 2-Q, 3-R
**B.** 1-R, 2-P, 3-Q
**C.** 1-Q, 2-R, 3-P
**D.** 1-R, 2-Q, 3-P
**Answer:** A. Classic trio – Appropriation = voted grants; Finance = overall accounts; Compliance = rule book.
**Tag:** Reports matching
Speed Tricks
| Situation | Shortcut | Example |
|---|---|---|
| Remember Articles | 148-CAP (CAG Appointment & Powers), 149-Duties | 148 → CAG, 149 → Duties |
| Removal similarity | CAG ≈ SC Judge | Both need Parliament address & proved misbehaviour |
| Audit order | “CFI-PAC” | Consolidated Fund → CAG audit → PAC examination |
| First CAG | VNR → Very Nice Rao | 1948 |
| UN body | 3-member UN Board of Auditors | CAG is permanent Indian seat |
Quick Revision
| Point | Detail |
|---|---|
| 1 | Art. 148 – Appointment, oath, salary charged on Consolidated Fund. |
| 2 | Art. 149 – Parliament decides CAG’s duties & powers (CAG’s DPC Act 1971). |
| 3 | Art. 150 – Form of accounts (President on CAG’s advice). |
| 4 | Art. 151 – Reports to be laid before Parliament/State legislature. |
| 5 | CAG’s salary = Rs. 3.5 lakh/month (equal to Cabinet Secretary). |
| 6 | CAG audits ~1500 entities every year; 60% effort on PSU audits. |
| 7 | Performance audit reports tagged as “No. 4” series. |
| 8 | Introduced Separate Audit Boards (SAB) for big PSU audits (1968). |
| 9 | International affiliations: INTOSAI, ASOSAI, UN Board of Auditors. |
| 10 | Only constitutional authority whose overseas tours are audited by itself! |
BETA
