CAG has powers to examine efficiency of policy decisions: Supreme Court

NEW DELHI: The Supreme Court has said that the Comptroller and Auditor-General had a duty to comment critically on the efficacy of policy decisions. The court rejected a PIL, seeking to rein in CAG, saying there should be no confusion over the auditor's mandate.

"Do not confuse the constitutional office of CAG with that of an auditor of a company or corporation...CAG is not the traditional Munimji to prepare only balance sheets. It is constitutionally mandated to examine the efficiency, effectiveness and economy of the decisions of the government in using resources. If CAG will not do this, then who will," an apex court bench comprising Justices RM Lodha and AR Dave asked.

The court's observation came amid criticism of CAG by the ruling side, over its report on coal block allocations. Prime Minister Manmohan Singh had described some of CAG's findings as 'disputable' and some as 'selective reading' of a 2006 law ministry opinion.

He termed as 'flawed' the auditor's premise that competitive bidding could have been introduced in 2006, by amending the existing administrative instructions. Congress spokespersons have made CAG their favourite whipping boy too. Congress general secretary Digvijaya Singh went to the extent of saying CAG Vinod Rai harboured political ambitions.

However, on Monday, the apex court said, "Article 149 of the Constitution, the 1971 Act and the Rules clearly mandate CAG to examine the efficiency, effectiveness and economy of the decisions. One should not forget that CAG report is tabled in Parliament through the President. There is a full-fledged mechanism to examine a CAG report and then debate it in Parliament. A constitutional office, as we said, should not be confused with a traditional Munimji," SC said.

To the plea of petitioner Arvind Gupta that CAG was meant to audit government expenditures and not comment on rationality of policy decisions made, the bench said "do not confuse the constitutional office of CAG with that of an auditor of a company or corporation".