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As our democracy matures, the role of CAG and Auditing is becoming more vital

Published: 10th Nov, 2023


Citizen being at the centre-stage for implementation of government programmes and as ultimate beneficiaries, there are lot of expectation of the CAG to assess the preparedness and planning, monitor and recommend corrective actions for realisation of the economic, social and environmental aspirations. 

The Comptroller and Auditor General of India (CAG)

  • The office plays a crucial role in this democratic framework by ensuring transparency, accountability, and financial integrity in government’s functioning.
  • Helps maintain the separation of powers between legislature and executive by ensuring that the government’s financial activities align with legislative intentions.
  • Through its audit findings and recommendations, the CAG promotes good governance practices and helps governments streamline their operations, reduce inefficiencies and adhere to financial discipline.
  • As India’s democracy matures, the CAG’s role becomes even more vital in promoting good governance and safeguarding the people’s interests.
  • To effectively discharge this responsibility, it is important for audit to actively work in tandem with citizens, appreciating their concerns and feedback.

Importance of Audit in furthering the Democracy

  • Citizen engagement guides audit in identifying high-risk areas of possible mismanagement and inefficiencies in governance, thereby improving focus and effectiveness.
  • In India’s federal, multiparty democracy with both Union and state governments responsible for implementation of numerous schemes, projects and programmes, enhancing engagement with stakeholders is imperative for audit.
  • This need is further heightened with the paradigm shift in the government delivery system, using Direct Benefit Transfers for flow of funds, and ensuring accurate targeting of beneficiaries.
  • Leveraging technology and digital solutions make audit’s citizen engagement more effective and
  • With increasing mobile density, smartphone applications may be used to solicit society’s suggestions. Digital reports with interactive data visualisation tools lead to better understanding and appreciation of our audit products.
  • Deployment of 5G connectivity will transform governance. If harnessed properly, the potential of these new technologies in our stakeholders and citizen engagement as well as overall audit strategies to make processes more efficient and effective.
  • Further using the results of social audit to aid CAG’s audit, and laying of audit reports in Parliament, state legislature helps to gauge the direction and prudence.

Strengthening Local Governance: A Holistic Approach to Accountability and Empowerment

  • The National Rural Employment Guarantee Act, enacted by the Parliament, mandated Gram Sabhas to conduct regular social audits, amplifying citizen oversight. The Mahatma Gandhi National Rural Employment Audit of Scheme Rules, initiated in 2011, expanded the scope of social audits.
  • The 73rd and 74th Constitutional amendments revolutionized India's democratic landscape, establishing tiers of self-governance.
  • The amendments aimed at empowering Panchayati Raj Institutions (PRIs), urban local bodies, and municipalities, fostering people's participation in planning, decision-making, and implementation.
  • The three-tier structure, reinforced by the Finance Commission's direct fund allocation, positioned these bodies as implementers of both Union and state government schemes, ensuring transparency.

Local Governance Accountability

  • Local fund auditors, designated by state governments, conduct primary audits and issue certificates. The CAG plays a pivotal role in strengthening local governance through capacity building, as recommended by the 11th Finance Commission.
  • Manuals and guidance issued by the CAG form the foundation for auditing and accounting by local governments. The Annual Technical Inspection Reports (ATIR) focus on assessing the efficiency of devolved functions reaching the grassroots.

Addressing Challenges

  • Recognizing the scarcity of competent accountants in remote localities, the CAG collaborates with the Institute of Chartered Accountants of India to launch online courses.
  • These courses to create a pool of qualified accountants for local bodies.

International Centre for Local Governance

  • In furtherance of local self-governance and accountability, an international center for local governance is envisioned.
  • This will serve as a hub for capacity building of local government auditors, nationally and internationally.
  • It will also function as a knowledge center and think-tank, addressing capacity building for grassroots stakeholders nationwide.

Perspectives from horizon of Constitutional Ethics

  • It aligns with the constitutional directive principles, emphasizing the accountability of the government to the citizens and the promotion of social and economic justice.
  • Principle of decentralization and subsidiarity, reflects constitutional ethics. It ensures that governance decisions are made at the closest proximity to the citizens, promoting self-governance and community participation which is in alignment with constitutional values.
  • The Constitution envisions transparency and accountability in governance, and the CAG's oversight ensures that these principles are upheld, contributing to the constitutional mandate of responsible and responsive governance.
  • The focus on capacity building for local accountants, especially in remote areas, addresses the constitutional principle of social justice. The initiative promotes inclusivity and equal access to resources and opportunities, aligning with constitutional values.

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