Article 149

Article 149 of the Constitution of India defines the duties, responsibilities, and powers of the Comptroller and Auditor-General (CAG) of India, one of the most important constitutional authorities responsible for maintaining the financial accountability and integrity of the Union and State governments. As the guardian of the public purse, the CAG plays a pivotal role in ensuring transparency in financial administration and upholding the principles of parliamentary democracy.

Constitutional Text

Article 149 states:

“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 and, until provision in that behalf is so made, shall perform such duties and exercise such powers in relation to the accounts of the Dominion of India and of the Provinces and of any authority or body as were conferred on or exercisable by the Auditor-General of India immediately before the commencement of this Constitution in relation to the accounts of the Dominion of India and of the Provinces respectively.”

This Article empowers Parliament to define the scope and extent of the CAG’s powers through legislation and ensures the continuity of audit functions from the pre-Constitution era.

Purpose and Objective

The objective of Article 149 is to:

• Provide a constitutional foundation for the CAG’s audit functions.
• Ensure that public funds are used legally, efficiently, and for the purposes intended.
• Maintain legislative oversight over executive financial operations by subjecting them to independent audit scrutiny.

Through Article 149, the CAG acts as a constitutional watchdog over public finance, ensuring that the executive remains accountable to Parliament and the people of India.

Historical Context

Before the adoption of the Constitution, the office of the Auditor-General of India existed under the Government of India Act, 1935. The post was responsible for auditing the revenues and expenditures of the Dominion and Provincial Governments.
When the Constitution came into effect in 1950, these responsibilities were transferred to the newly created Comptroller and Auditor-General of India, established under Article 148. Article 149 retained the essential features of the earlier system while bringing them under the authority of the Constitution.

Scope of Duties and Powers

Article 149 empowers the CAG to perform duties and exercise powers in relation to:

1. Accounts of the Union and the States:The CAG audits all receipts and expenditure of the Government of India and the State Governments, ensuring that funds are utilised according to legislative authorisation.
2. Authorities and Bodies under Law:Parliament may, by law, extend the CAG’s jurisdiction to other authorities, institutions, or bodies, including government companies, public corporations, and autonomous agencies.
3. Continuity of Pre-Constitutional Powers:Until new laws are enacted, the CAG continues to perform duties similar to those exercised by the Auditor-General of India before 1950, thereby maintaining institutional continuity.

Legislative Framework

The Parliament, exercising its powers under Article 149, enacted the Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971, which comprehensively defines the CAG’s jurisdiction. Under this Act, the CAG:

• Audits all expenditure from the Consolidated Fund of India and the Consolidated Funds of the States.
• Audits transactions of the Contingency Fund and Public Account.
• Conducts performance audits to evaluate efficiency, economy, and effectiveness in public spending.
• Audits the accounts of government-owned corporations and companies, including those where the government holds a controlling interest.
• Reports audit findings to the President or Governor, who must lay them before Parliament or the State Legislature.

This legislation operationalises Article 149 and expands the CAG’s role beyond mere accounting to performance and compliance auditing.

Functions of the CAG under Article 149

The CAG’s responsibilities can be categorised as follows:

1. Audit of Receipts:Ensures that revenues, taxes, and duties are collected as per law and credited properly to the Consolidated Fund.
2. Audit of Expenditure:Verifies whether government spending has been authorised by the legislature and used for the intended purposes.
3. Audit of Public Enterprises:Reviews the financial statements of public sector undertakings to ensure compliance with sound accounting principles.
4. Performance Audit:Evaluates whether government programmes and schemes achieve their objectives with efficiency and economy.
5. Audit of Autonomous and Statutory Bodies:Examines the accounts of local bodies, universities, and authorities substantially financed by government funds.
6. Reporting Function:Submits audit reports to the President (for Union accounts) and to the Governor (for State accounts), ensuring accountability to Parliament and State Legislatures.

Important Supreme Court Judgments

Several landmark judgments have clarified and strengthened the CAG’s constitutional role and independence:

• K. S. Venkataraman v. Union of India (1954):The Supreme Court affirmed that the CAG is an independent constitutional authority, free from executive control, and accountable only to the Constitution.
• State of Bihar v. Bihar Rajya Bhumi Vikas Bank Ltd. (2006):The Court held that the CAG’s audit powers extend to institutions substantially funded by the State, reinforcing financial accountability in the broader public sector.
• Comptroller and Auditor General of India v. Union of India (2018):The Court clarified that the CAG can audit private entities receiving substantial government funds, reaffirming that public accountability accompanies public expenditure.

These decisions collectively affirm that the CAG’s audit jurisdiction is dynamic and expansive, extending wherever public funds are involved.

Significance of Article 149

1. Ensures Financial Accountability:The CAG’s audits serve as a vital mechanism for holding the executive accountable to the legislature for the use of public funds.
2. Supports Parliamentary Oversight:The CAG’s reports form the basis for examination by the Public Accounts Committee (PAC) and the Committee on Public Undertakings, ensuring detailed legislative scrutiny.
3. Promotes Transparency and Efficiency:Through performance and compliance audits, the CAG identifies inefficiencies, irregularities, and mismanagement in public spending.
4. Prevents Corruption and Waste:By auditing and reporting on government financial operations, the CAG deters financial misconduct and enhances fiscal discipline.
5. Upholds Democratic Accountability:The CAG strengthens the democratic framework by ensuring that every rupee spent by the government is subject to public audit and legislative review.

Challenges and Limitations

Despite its constitutional independence, the CAG faces several challenges:

• Dependence on Government Data: Audit findings often rely on records maintained by the executive.
• Evolving Audit Scope: Expanding government activities in public-private partnerships and welfare schemes require updated audit laws and methodologies.
• Implementation Gap: Recommendations made in audit reports are not always acted upon by the executive.
• Resource Constraints: The increasing workload on the Indian Audit and Accounts Department demands better staffing and modern technology.

To maintain its relevance, the CAG’s powers and processes must continuously adapt to the complexities of contemporary governance.

Relationship with Other Constitutional Articles

• Article 148: Establishes the office of the Comptroller and Auditor-General of India.
• Article 150: Empowers the President to determine the form in which Union and State accounts are to be kept, in consultation with the CAG.
• Article 151: Mandates that the CAG’s reports be laid before Parliament or State Legislatures for scrutiny.

Together, these provisions ensure a complete constitutional framework for audit, accountability, and fiscal discipline.

Contemporary Role of the CAG

Today, the CAG’s audit reports play a vital role in:

• Exposing irregularities in government projects, procurement, and public expenditure.
• Supporting anti-corruption and transparency measures.
• Enhancing fiscal policy formulation and performance management.
• Strengthening citizen trust in government institutions through transparent reporting.

The CAG has also embraced digital audits and data analytics, aligning its operations with modern standards of governance and technology.

Constitutional Significance

Article 149 is fundamental to India’s democratic and financial architecture. It upholds the principle of accountability of the executive to the legislature, ensuring that the government acts as a trustee of public funds.