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India needs a free and fair CAG appointment process

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In a pathbreaking judgment on March 2, the Supreme Court (SC) ruled that the President will appoint the Chief Election Commissioner (CEC) and elections commissioners (ECs) on the advice of a committee consisting of the Prime Minister (PM), Leader of the Opposition (LoP) in the Lok Sabha, and the Chief Justice of India (CJI). This was hailed as an important step to ensure the independence of the poll body.

The CAG’s Duties, Power and Conditions of Service Act, 1971, defines the duties and powers of the top official. (PTI)

If free and fair elections are the backbone of a democracy, an independent audit system is crucial for a country’s financial hygiene and ensuring that the process of State welfare delivery is error-free. To ensure both, it is essential that the Comptroller and Auditor General of India (CAG) — the nation’s supreme audit institution (SAI) — is appointed in a free and fair manner. Unfortunately, the CAG appointment process, as prescribed under Article 148 of the Constitution, is not transparent.

The CAG’s Duties, Power and Conditions of Service Act, 1971, defines the duties and powers of the top official. The procedure starts with the cabinet secretary preparing a shortlist of names, which is approved by the finance minister and then placed before the PM, who then recommends a name to the President. There are no criteria for the shortlist. The Constitution or the 1971 Act does not even prescribe any required qualifications for candidates. This compromises the independence of CAG vis-à-vis the executive and weakens the independence of the auditing process.

The issue that CAG should be placed above the influence of an executive authority was discussed in the Constituent Assembly (CA). Dr BR Ambedkar felt CAG “ought to have far greater independence than the judiciary itself” and said that he saw CAG as “probably the most important officer in the Constitution of India”. During these debates, Dr Ambedkar also dwelt on the absence of power (to CAG) compared to the judiciary and said: “[this] means that the staff of the auditor general may be appointed by the executive and can be subjected to disciplinary action”.

He added, “I have not the slightest doubt in my mind that if an officer does not possess the power of disciplinary control over his immediate subordinates, his administration is going to be thoroughly demoralised. From that point of view, I should have thought that it would have been proper in the interest of the people that such a power should have been given to the auditor general.” However, he did not press this point and said, “But, sentiment seems to be opposed to investing the Auditor-General with such a power.”

How do other countries appoint SAIs?

The National Audit Office is the top auditor of the United Kingdom (UK). The Exchequer and Audit Act of the UK (1983) provides that the selection will be done by the PM and the chairman of the committee of public accounts, and ratified by the House of Commons. The UK uses a recruitment consultant for the process. The company uses its corporate networks, places online and newspaper ads to encourage applicants. The recruiting consultants produce a short list of suitable candidates from a pool of applicants for the hiring panel chaired by the Public Accounts Committee.

In the United States, the comptroller general heads the government accountability office (GAO), an agency within the federal government’s legislative branch. The President appoints the comptroller general with the advice and consent of the Senate. When a vacancy arises, Congress establishes a bipartisan, bicameral commission recommending individuals to the President.

Japan has a board of audit with an audit commission comprising three commissioners and a general executive bureau. A commissioner is appointed with the cabinet’s consent of both Houses of the Diet. The cabinet appoints the president of the board.

The constitution of Sri Lanka provides that the auditor general shall be a qualified auditor and should be appointed by the president, subject to the approval of the constitutional council.

Like these examples, India must also formulate transparent and strict guidelines for the CAG appointment process. A committee comprising the Lok Sabha speaker, CJI, the chairman of the Public Accounts Committee, and the Leader of the Opposition should be constituted to shortlist names for CAG, and at least three names should be forwarded to the President to make the final selection.

Anupam Kulshreshtha is former deputy CAG, and currently teaches law at IMT, Ghaziabad

The views expressed are personal

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