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Governance, CAG & Financial Administration

Paper-III Finance & Economics (Post-specific) · Finance & Economics Coverage

Useful for: SSC CGL

Overview

Financial administration covers how public money is held, spent and audited, with the CAG as the constitutional auditor.

Key points

Consolidated Fund of India: Article 266(1); Public Account: Article 266(2); Contingency Fund: Article 267.
No money can be withdrawn from the Consolidated Fund without an Appropriation Act (Article 114).
The CAG is appointed by the President under Article 148; term six years or until age 65.
CAG reports on Union accounts are submitted to the President (Article 151) and laid before Parliament.
The Public Accounts Committee examines CAG reports; by convention it is chaired by a member of the opposition.

Explanation

The CAG can be removed only like a Supreme Court judge.
Types of audit: compliance, financial and performance audit.
The Contingency Fund is at the disposal of the President for unforeseen expenditure.
Charged expenditure (e.g. CAG’s salary) is not voted by Parliament.

Step by step

Identify the concept, rule or constitutional provision involved.
Apply the definition or formula precisely.
Check signs, totals and the direction of the effect.

Examples

CAG reports on Union accounts are submitted under → Article 151.
The Contingency Fund of India is created under → Article 267.
The committee that examines CAG reports → the Public Accounts Committee.

Traps and advanced points

Trap: Mixing Articles 266 and 267.
Trap: Thinking the CAG reports directly to Parliament.
Trap: Treating charged expenditure as voted.

Quick revision

Art 266 Consolidated/Public Account; 267 Contingency.
CAG Art 148; reports Art 151.
PAC examines CAG reports.

Practice MCQs

The Comptroller and Auditor General of India is provided for under Article
1. 148
2. 280
3. 324
4. 76
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Answer: (a) 148. Article 76 deals with the Attorney General.
The CAG holds office for
1. life
2. 5 years
3. 6 years or until 65 years of age, whichever is earlier
4. until 62 years
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Answer: (c) 6 years or until 65 years of age, whichever is earlier. Removal is like that of a Supreme Court judge.
The CAG submits audit reports on Union accounts to the
1. President
2. Prime Minister
3. Speaker
4. Finance Minister
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Answer: (a) President. The President lays them before Parliament (Article 151).
Which parliamentary committee examines CAG reports?
1. Public Accounts Committee
2. Estimates Committee
3. Business Advisory Committee
4. Committee on Petitions
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Answer: (a) Public Accounts Committee. The CAG is called its friend, philosopher and guide.
The Consolidated Fund of India is provided for under Article
1. 300
2. 267
3. 112
4. 266
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Answer: (d) 266. Article 267 provides the Contingency Fund.
The annual financial statement (Budget) of the Union is laid under Article
1. 266
2. 202
3. 112
4. 110
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Answer: (c) 112. Article 202 covers states' budgets.

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Notes and questions are written by Kundali IQ for practice. They are not official papers; always check the latest official notification for the syllabus and pattern.