Finance Commission, CAG and the Attorney General

Finance Commission (Art 280)

• Constituted by the President every five years (or earlier). A chairman and four other members.
• Recommends: the distribution of the net proceeds of taxes between the Union and the States; the principles governing grants-in-aid (Art 275); measures to augment the Consolidated Fund of a State to supplement the resources of Panchayats and Municipalities (on the basis of the State Finance Commission).
• Its recommendations are advisory. The government lays the report before Parliament with an explanatory memorandum.
• First Finance Commission: 1951, headed by K.C. Neogy.
• The 16th Finance Commission is headed by Dr Arvind Panagariya and covers 2026-27 to 2030-31.

Comptroller and Auditor General (Arts 148 to 151)

• Head of the Indian Audit and Accounts Department and the "guardian of the public purse". Dr Ambedkar called the CAG "the most important officer under the Constitution".
• Appointed by the President. Term: six years or age 65, whichever is earlier. Removed in the same way as a Supreme Court judge.
• After retirement the CAG cannot hold any other office under the government.
• Audits all receipts and expenditure of the Union, States and bodies substantially financed by them. Submits reports to the President, who lays them before Parliament. The Public Accounts Committee examines them.
• The CAG audits government companies and, in some cases, local bodies.
• A CAG is not a member of the Cabinet and has no power to disallow expenditure. He only points out irregularity.
• V. Narahari Rao was the first CAG (1948).

Attorney General of India (Art 76)

• The first law officer of the Government. Appointed by the President. He must be qualified to be a Supreme Court judge.
• Holds office during the pleasure of the President. Has the right to speak in Parliament but not to vote.
• He is not a government employee and not debarred from private practice, but he must not advise against the Government of India.
• Solicitor General and Additional Solicitor Generals assist (not constitutional posts).
• At the State level: the Advocate General (Art 165), appointed by the Governor.