RAS Pre 2021, held on 27 October 2021. Question text as printed in RPSC's booklet; answer as per RPSC's final answer key.

Assertion (A) : The Duty of Comptroller and Auditor General is not merely to ensure the legality of expenditure but also its propriety. Reason (R) : He has to uphold the Constitution and the Laws of Parliament in the field of financial administration.

Q: What is the answer to RAS Pre 2021 Q36?

(2). Correct — option (2), Both (A) and (R) are true and (R) is the correct explanation of (A). Assertion (A) is true. The Audit Code issued by the authority of the Comptroller and Auditor General of India (first edition, 1950) calls it an essential function of Audit to bring to light not only cases of clear irregularity but also improper expenditure or waste of public money, "even though the accounts themselves may be in order". The Code calls this audit against propriety. It adds that seeing that rules and orders have been observed is not sufficient; the broad principles of orthodox finance must also be borne in mind. The CAG's Regulations on Audit and Accounts, as substituted in August 2020, keep propriety among the broad objectives of audit, alongside legality, validity and regularity. Reason (R) is true. The oath the CAG takes under Article 148(2), set out in Form IV of the Third Schedule, ends with the promise to "uphold the Constitution and the laws". Article 149 gives the CAG the duties Parliament prescribes by law over the accounts of the Union and the States. RPSC's key treats (R) as the explanation of (A): on that reading, the CAG's audit extends to propriety because the office is charged with upholding the Constitution and the laws in financial administration. The code is option (2), Both (A) and (R) are true and (R) is the correct explanation of (A).

(1)(A) is false but (R) is true
(2)Both (A) and (R) are true and (R) is the correct explanation of (A)
(3)(A) is true but (R) is false
(4)Both (A) and (R) are true but (R) is not a correct explanation of (A)

Answer

(2)

Why

Correct — option (2), Both (A) and (R) are true and (R) is the correct explanation of (A).

Assertion (A) is true. The Audit Code issued by the authority of the Comptroller and Auditor General of India (first edition, 1950) calls it an essential function of Audit to bring to light not only cases of clear irregularity but also improper expenditure or waste of public money, "even though the accounts themselves may be in order".

The Code calls this audit against propriety. It adds that seeing that rules and orders have been observed is not sufficient; the broad principles of orthodox finance must also be borne in mind.

The CAG's Regulations on Audit and Accounts, as substituted in August 2020, keep propriety among the broad objectives of audit, alongside legality, validity and regularity.

Reason (R) is true. The oath the CAG takes under Article 148(2), set out in Form IV of the Third Schedule, ends with the promise to "uphold the Constitution and the laws". Article 149 gives the CAG the duties Parliament prescribes by law over the accounts of the Union and the States.

RPSC's key treats (R) as the explanation of (A): on that reading, the CAG's audit extends to propriety because the office is charged with upholding the Constitution and the laws in financial administration. The code is option (2), Both (A) and (R) are true and (R) is the correct explanation of (A).

Why the others are wrong

(1)
(A) is false but (R) is true — (A) is not false. The CAG's Audit Code (1950) makes it an essential function of Audit to bring to light improper expenditure or waste of public money even where the accounts are in order — that is, to look at propriety, not legality alone.
The CAG's Regulations on Audit and Accounts (2020) still list propriety among audit's broad objectives, so a code that rejects (A) cannot be right.
(3)
(A) is true but (R) is false — (R) is not false. The CAG's oath in Form IV of the Third Schedule ends with the promise to uphold the Constitution and the laws, and Article 149 ties the CAG's duties over the accounts of the Union and the States to law made by Parliament.
Both statements hold.
(4)
Both (A) and (R) are true but (R) is not a correct explanation of (A) — This code accepts both statements but denies the link, which RPSC's key does not. On the key, the CAG's duty to uphold the Constitution and the laws in financial administration is the reason the audit reaches beyond legality to propriety.
The key marks option (2), which keeps the link.

Concept

The Comptroller and Auditor-General of India has a chapter of its own in the Constitution, Articles 148 to 151. Article 148 provides for appointment by the President and removal only in like manner and on the like grounds as a Supreme Court Judge.

The CAG takes the same form of oath as Supreme Court Judges (Third Schedule, Form IV), ending "that I will uphold the Constitution and the laws." Article 148(4) bars the CAG from further office under the Union or any State after leaving office.

The Audit Code of 1950 sets two tests. One is whether the rules and orders of competent authority were observed. The other, audit against propriety, supports, in the Code's words, "a reasonably high standard of public financial morality".

The Code lists standards of financial propriety: expenditure should not be prima facie more than the occasion demands, and no authority should sanction expenditure to its own advantage, among others.

RPSC's syllabus lists, under Indian Constitution, Political System & Governance, "Election Commission of India, Comptroller and Auditor General, NITI Aayog, Central Vigilance Commission, Lokpal, Central Information Commission, National Human Rights Commission."

The CAG's reports reach the legislatures through the executive heads. Under Article 151, reports on the Union's accounts go to the President, who has them laid before each House of Parliament; reports on a State's accounts go to the Governor, who has them laid before the State Legislature.

Article 150 adds that the accounts of the Union and the States are kept in the form the President prescribes on the CAG's advice.

Article 148(6) charges the administrative expenses of the CAG's office on the Consolidated Fund of India.

Key facts

Article 148(1): the CAG is appointed by the President and removed only in like manner and on the like grounds as a Supreme Court Judge.
Third Schedule, Form IV: the CAG swears to uphold the Constitution and the laws.
Article 149: the CAG's duties and powers over the accounts of the Union and the States are as prescribed by law made by Parliament.
Audit Code (1950): Audit must bring to light improper expenditure or waste of public money even when the accounts are in order.
Regulations on Audit and Accounts (2020), regulation 4: audit examines legality, validity, regularity, propriety, economy, efficiency and effectiveness of financial management.

Two tests in audit

Regularity→Were the rules and orders of competent authority observed?

Audit against propriety→Was it proper — not more than the occasion demands, not for the sanctioning authority's own advantage?

The CAG's oath (Third Schedule, Form IV)→"uphold the Constitution and the laws"

(A) and (R) are both true; RPSC's key links them: option (2).

Study next

Articles 148–151: the CAG in the ConstitutionCanons of financial propriety in the Audit CodePublic Accounts Committee and the CAG's reportsRemoval of the CAG compared with a Supreme Court JudgeThe CAG's reports on State accounts under Article 151(2)

Common traps

Limiting audit to legality. The Audit Code requires Audit to flag improper expenditure even when the accounts are in order.
Assuming the Constitution itself lists all the CAG's audit duties. Article 149 leaves them to be prescribed by law made by Parliament.
Treating an Assertion–Reason code as settled once both statements are true. The last step is whether (R) explains (A), which RPSC's key accepts here.

A question can pair a statement about the CAG's audit with a reason drawn from the office's constitutional position, as here.

A question can also ask about the CAG's removal, oath, reports under Article 151, or the difference between regularity and propriety audit.

Related PYQs

UnlockIAS will link similar questions from RAS Pre 2018 and 2013 here once those papers are published on this site.

Practice

practice — not a real PYQ
Under Article 151(2), the CAG's reports relating to the accounts of a State are submitted to —
- (a)The President of India
- (b)The Governor of the State
- (c)The Speaker of the Legislative Assembly
- (d)The Chief Minister
Answer(2) — Article 151(2) says they are submitted to the Governor, who causes them to be laid before the State Legislature. Reports on the Union's accounts go to the President (1) under Article 151(1). The Speaker (3) and the Chief Minister (4) are not named.
practice — not a real PYQ
The Comptroller and Auditor-General of India can be removed from office —
- (a)By the President at pleasure
- (b)In like manner and on the like grounds as a Judge of the Supreme Court
- (c)By a resolution of the Lok Sabha alone
- (d)By the Prime Minister on the advice of the Finance Minister
Answer(2) — Article 148(1) says the CAG shall only be removed from office in like manner and on the like grounds as a Judge of the Supreme Court. Removal at pleasure (1), by one House alone (3) or by the Prime Minister (4) is not the procedure the Article lays down.