Comptroller and Auditor General of India (CAG)

The Comptroller and Auditor General of India (CAG) is a constitutional authority established under Article 148 of the Indian Constitution — the supreme audit institution of India responsible for auditing all receipts and expenditures of the central government, state governments, and government-owned entities including public sector undertakings (PSUs), autonomous bodies, and government companies. The CAG is appointed by the President of India and enjoys constitutional independence — ensuring that audits of government finances are conducted without executive interference. The CAG's audit reports are submitted to the President (for central government accounts) or Governors (for state accounts) and are laid before Parliament or state legislatures for scrutiny by Public Accounts Committees. CAG reports have historically uncovered significant financial irregularities, policy failures, and governance deficiencies in government programmes — including the famous 2G spectrum allocation audit report (2010), coal block allocation audit, and Commonwealth Games expenditure audit — generating major political and economic consequences. For Indian equity investors, particularly those holding PSU stocks, CAG audit findings about specific government companies — including allegations of financial mismanagement, asset undervaluation, or contract irregularities — can significantly affect stock valuations and government disinvestment plans for affected entities.