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.
Approach · directive: “discuss”
What it asks · Explain the constitutional and statutory basis of CAG's powers, then argue whether auditing how policies are implemented crosses into questioning policy itself.
It asks 2 things — answer each
- Discuss: the constitutional and statutory basis of the CAG's audit powers (Articles 148 to 151 and the 1971 Act)
- Discuss: whether auditing the government's policy implementation oversteps the CAG's jurisdiction, with a reasoned position
Open with · Article 149 leaves the CAG's duties to Parliament, set out in the 1971 Act; the CAG's 2007 Regulations add performance audit of economy, efficiency and effectiveness.
Cover
- Basis: Article 148 secures independence; Article 149 and the 1971 Act set the mandate; Article 151 sends reports to the legislature and its Public Accounts Committee.
- Three audits: financial, compliance and performance audit under the Regulations on Audit and Accounts, 2007.
- Courts: Arvind Gupta v Union of India (2012) held performance audit in-built in the 1971 Act.
- Not overstepping: auditing implementation tests whether voted money delivered results, a duty to Parliament.
- Overstepping risk: judging the merits of policy or presuming speculative losses, as the Joint Parliamentary Committee said of the 2G report.
- Way forward: audit outcomes and process, state assumptions, give departments a reply and leave judgement to the PAC.
Close with · SDG target 16.6 calls for effective, accountable and transparent institutions; a CAG that audits implementation, not policy wisdom, serves that goal and keeps its authority.
Add value (verified)
- Article 149 leaves the CAG's duties and powers to be set by Parliament through law.The Constitution of India (as on 1 May 2024), Article 149 — Legislative Department ↗“The Comptroller and Auditor-General shall perform such duties and exercise such powers in relation to the accounts of the Union and of the States and of any other authority or body as may be prescribed by or under any law made by Parliament”
- The CAG's Regulations on Audit and Accounts, 2007 define performance audit as assessing how far an activity, programme or organisation operates economically, efficiently and effectively.Comptroller and Auditor General of India, Regulations on Audit and Accounts 2007 page (web.archive.org copy) ↗“the extent to which an activity, programme or organisation operates economically, efficiently and effectively (performance audit)”
- In Arvind Gupta v Union of India the Supreme Court held that examining economy, efficiency and effectiveness is in-built in the 1971 Act and found no unconstitutionality in the 2007 Regulations.Comptroller and Auditor General of India, 'Important Judgements' (web.archive.org copy) ↗“CAG's function to carry out examinations into economy, efficiency and effectiveness with which the Government has used its resources is inbuilt in the 1971 Act”
- Arvind Gupta v Union of India was decided on 1 October 2012 (Writ Petition (C) No. 393 of 2012).Comptroller and Auditor General of India, 'Important Judgements' (web.archive.org copy) ↗“Writ Petition(C) No. 393 of 2012, decided on October 1, 2012”
- SDG target 16.6 calls for effective, accountable and transparent institutions at all levels.United Nations, Sustainable Development Goal 16 — targets ↗“Develop effective, accountable and transparent institutions at all levels”
- The Joint Parliamentary Committee on 2G licence allocation (report of 29 October 2013) held that the CAG's loss figures should have been based on proven facts.PRS Legislative Research, Joint Parliamentary Committee report summary, Allocation of 2G licences ↗“The figures of loss to the exchequer as calculated by CAG should have been based on proven facts”
Question: UPSC's CS (Main) 2016, GS Paper II — paper ↗. Approach: Minimalist IAS, checked 3 Oct 2026 (how we verify) — UPSC publishes no model answers. ·
Model answer· 286words · Minimalist IAS
Article 149 leaves the CAG's duties to Parliament, which set them in the CAG (Duties, Powers and Conditions of Service) Act, 1971. The CAG's Regulations on Audit and Accounts, 2007 add performance audit: how far a programme operates economically, efficiently and effectively. The question is where scrutiny of implementation ends and second-guessing of policy begins.
Basis of the CAG's powers
- Article 149: Parliament sets duties
- 1971 Act: audit mandate
- Audit report
- Article 151: laid before legislature
- PAC scrutiny
- Independence: Article 148 shields appointment, removal and service conditions.
- Three audits: financial, compliance and performance audit, the last testing the 'three Es'.
- Judicial endorsement: in Arvind Gupta v Union of India (decided 1 October 2012) the Supreme Court held examination of economy, efficiency and effectiveness in-built in the 1971 Act.
Why auditing policy implementation is within jurisdiction
- Accountability to Parliament: Parliament votes funds for outcomes; performance audit tells it whether they were delivered.
- Reporting to the legislature: under Article 151 audit reports reach the legislature, so scrutiny of outcomes feeds Parliament's own oversight.
When it could overstep
- Merits of policy: questioning the choice itself, such as allocation over auction, substitutes audit for executive judgement.
- Presumptive losses: the CAG's 2G spectrum loss estimate was faulted by the Joint Parliamentary Committee (2013) as not based on proven facts, though the report set off wide scrutiny.
Way forward
- Clear line: audit outcomes, process and value for money, not the wisdom of policy.
- Fair process: state every assumption behind a loss figure, record the department's reply and leave the verdict to the Public Accounts Committee.
Auditing implementation sits within the CAG's mandate; auditing policy wisdom does not. Holding that line serves SDG target 16.6, 'effective, accountable and transparent institutions at all levels'.
Prepared by Minimalist IAS to the answer standard of Shivam Singh (mentor, 7 years) · facts checked against official sources (how we verify) · updated 3 Oct 2026. UPSC publishes no model answers: compare your structure and coverage with this, then write your own.
