The Audit Watchdog Has Lost Its Bite — The CAG Must Reinvent
Swati Pandey, Principal Director, Office of the Comptroller and Auditor General of India, presented key audit findings at the CAG–ICSSR Colloquium (Image ICSSR on X)
A 75-year-old institution built for a slower Republic is failing a digital-era democracy. To protect taxpayers in real time, the CAG must reinvent itself—from post-mortem audits to proactive, accountable oversight.
By P. Sesh Kumar
New Delhi, November 22, 2025 — For 75 years, the Comptroller and Auditor General of India has been celebrated as the Republic’s guardian of public money. Born in the Constituent Assembly’s intense debates on institutional independence, the CAG enjoyed unmatched autonomy—but also insulation from real-time governance. In the early decades this insulation preserved integrity; today, it has become inertia.
Across ministries and departments—from Atomic Energy to Defence to IITs—senior officials privately echo a stinging criticism once voiced bluntly by a retired IAS officer: “The CAG and its officers are cowards… they abhor concurrent audit.” Serving secretaries agree. Even retired IAAS officers concede that while full-scale participation in decision-making is impractical, some institutionalised pre-decisional advisory mechanism has become unavoidable.
Defenders of the CAG dismiss such critiques as frustration born from ignorance of the constitutional scheme. They point to MoUs with IITs/IIMs, ICAI/IPAI and limited proactive media engagement as innovation. But the redacted Rafale audit, the abandonment of national-level performance audits since 2018, and a performative embrace of AI and Big Data—without changing the audit product—signal an institution losing confidence in its own disruptive power.
What unites critics is not sentiment but diagnosis: India’s governance has become real-time; the CAG remains post-facto. The age of post-mortem audit has collided with an era of instant digital decision-making where crores move in seconds and digital trails disappear in minutes.
A Constitutional Sentinel Built for Another Era
The Constituent Assembly modelled the CAG on the British Auditor General but strengthened it constitutionally, fearing executive dominance. Ambedkar and others insisted the CAG must be insulated from influence and empowered to scrutinise expenditure without fear or favour. Independence and post-facto accountability were the pillars. The fear was under-reach, not overreach.
But the framers never imagined a trillion-dollar economy, algorithmic governance, defence offsets, sovereign funds, PPP labyrinths, or welfare schemes disbursing lakhs of crores digitally. They created a watchdog fit for a paper-driven state—not a digital republic.
Despite recent announcements like “CAG-Connect”, “One IAAD One System” and AI strategy frameworks, structural audit practice remains stuck in a colonial mould.
The Rise—When the CAG Roared
For decades, the CAG was respected but not feared. That changed dramatically in the 2000s. The performance audits of 2G spectrum allocation, coal block allocation, and the Commonwealth Games blew open administrative secrecy, triggered political tremors, and redefined public accountability.
For a brief moment, the CAG embodied what the Constitution intended: fearless, disruptive, speaking truth to power. Critics even accused it of creating a “policy paralysis.” Ironically, that success sowed the seeds for resistance.
The Decline—From Audit Lion to Paper Tiger
Successive governments, regardless of party, became wary of a combative auditor. What followed was the “age of caution.” The Rafale audit—with pricing details redacted—became emblematic. The halt of national performance audits after 2018 shocked insiders. AI-driven audit remained stuck in presentations rather than practice.
In the words of one insider: “Officers became experts in describing the future; they stopped building it.”
The Core Critique: Fear of Responsibility
The loudest charge against the CAG is psychological, not constitutional: fear of owning responsibility in real time.
Whenever concurrent or advisory audit is proposed, standard objections surface—“unconstitutional”, “conflict of interest”, “will slow decision-making”. But international practice contradicts these fears. The UK NAO, US GAO, Canadian OAG, and Australian ANAO routinely engage in advisory, concurrent, or risk-based oversight without compromising independence.
The real reason for resistance, insiders admit, is discomfort:
- Concurrent audit exposes incompetence instantly.
- Post-facto audit hides incompetence indefinitely.
- Concurrent audit demands domain expertise.
- Post-facto audit relies on templates.
Advisory oversight would force the CAG into the arena where mistakes can be prevented—not merely narrated.
Why India’s Governance Now Demands Concurrent or Advisory Audit
Modern governance is real-time. Audit cannot remain archival. Welfare schemes, defence procurement, digital governance, energy markets, cybersecurity, and PPPs involve complex, dynamic risks. Entering three to five years after execution turns audit into a post-mortem that helps no one.
The taxpayer gets chronology, not correction. Government gets commentary, not accountability. Parliament gets rituals, not reform.
Does the Supreme Court’s Balaji Judgement Forbid Concurrent Audit?
No. The 2013 Balaji judgment is widely misinterpreted. The Court only held that
- the CAG cannot be compelled to pre-approve government schemes;
- the CAG’s constitutional duty is post-facto audit.
But the Court did not say the CAG is forbidden from advisory or concurrent activity. It merely clarified that audit cannot become an arm of the executive. Advisory oversight, voluntarily or statutorily structured, remains constitutionally permissible.
In fact, Balaji protects the CAG by ensuring advisory input can never be misconstrued as decision-making.
Why a Constitutional Amendment Helps
The Constitution does not bar advisory audit; cultural interpretation does. Decades of bureaucratic caution have misread silence as prohibition. A constitutional amendment would not empower the CAG—it would protect the CAG by:
- formally distinguishing advisory warnings from decisions;
- preventing governments from weaponizing audit advice as “approval”;
- enabling real-time risk-flagging without fear of blame;
- clarifying boundaries so independence and neutrality are preserved.
It would transform ambiguity—which breeds timidity—into a bright-line rule.
A Reborn Audit Doctrine for a Digital Republic
India’s audit doctrine must evolve through three pillars:
- Real-Time Advisory Audit
For high-risk domains—welfare schemes, defence acquisition, digital governance, PPPs, and infrastructure—without entering decision-making. - Concurrent Analytics Audit
Using AI, LLM-driven anomaly detection, and real-time data systems to flag deviations as they occur. - Post-Facto Accountability
Retained only where real-time oversight is structurally impossible.
This is not dilution. It is expansion—faithful to the spirit of the framers who wanted an auditor fearless enough to confront power.
The Watchdog Must Step Into the Arena
India no longer needs a museum-model auditor. It needs a combat-model guardian—one who sees in the dark, warns before damage, and stands at the gate before the treasury is robbed.
If the CAG does not evolve, it will drift into irrelevance, protected by tradition but useless to the taxpayer. If it reinvents itself, supported by constitutional clarity and operational transformation, it can reclaim its role as the Republic’s most vital watchdog.
The Republic has changed. The money flows have changed. Risks have changed. For the CAG to matter, it must change too.
(This is an opinion piece, and views expressed are those of the author only)
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