Article 150 of the Indian Constitution: Form of accounts of the Union and of the States | Kanoon.site
Kanoon.site ≐ Blog
« Article 145 Article 151 »

Article 150 of the Indian Constitution: Form of accounts of the Union and of the States

Part: V
Shorthand Notes: CAG advises President on account form (Union & States)

Article 150 of the Indian Constitution plays a crucial role in determining the framework within which the financial accounts of both the central government (Union) and the state governments are maintained. It lays down the authority and procedure for prescribing the format and structure of these accounts, ensuring uniformity and proper standards in financial record-keeping.

This article highlights the significant influence of the Comptroller and Auditor-General of India (CAG) in the realm of government accounting. While the President is the prescribing authority, this power is exercised only upon the advice of the CAG, underscoring the independence and technical expertise of the CAG’s office in matters of government finance.

Original Text

150. Form of accounts of the Union and of the States.

The accounts of the Union and of the States shall be kept in such form as the President may, on the advice of the Comptroller and Auditor-General of India, prescribe.

Detailed Explanation

Article 150 mandates that the financial accounts of the Government of India (Union) and each state government must be maintained in a specific format. This format is not left to the discretion of individual ministries, departments, or state governments but is centrally determined to ensure consistency and comparability. The authority to prescribe this form rests with the President of India. However, this power is not exercised independently by the President. The Constitution explicitly requires the President to act on the advice of the Comptroller and Auditor-General of India.

This signifies that the technical expertise and professional judgment regarding the structure and classification of government financial transactions lie with the CAG. The “form” of accounts refers to the broad structure, classification, categories, and heads under which receipts and expenditures are recorded and presented. It dictates how financial data is organised, enabling systematic accounting, analysis, and audit. It does not pertain to the actual content or correctness of individual transactions, which falls under the audit function. The CAG’s role in advising on the form is crucial for establishing robust accounting standards that facilitate effective financial management, transparency, and comprehensive auditing under Article 149. Any changes or revisions to the prescribed form also require the same procedure involving the CAG’s advice to the President.

Detailed Notes

  • Article 150 is part of Part V of the Constitution, specifically Chapter V, which deals with the Comptroller and Auditor-General of India.
  • It pertains to the form (structure, classification, heads) of accounts, not the audit or content of transactions.
  • The article covers the accounts of both the Union Government and the State Governments.
  • The authority to prescribe the form of these accounts rests with the President of India.
  • The President can only prescribe the form on the advice of the Comptroller and Auditor-General of India (CAG).
  • This highlights the CAG’s pivotal role as the chief technical authority on government accounting standards in India.
  • The requirement for the President to act on the CAG’s advice ensures that the prescribed form is based on sound accounting principles and facilitates effective financial administration and audit.
  • The form of accounts prescribed under this article applies uniformly to all government departments and entities whose accounts are subject to the CAG’s oversight.
  • This provision is fundamental for maintaining uniformity and comparability in the financial reporting of different government entities across the country.
  • Changes or modifications to the prescribed form must also follow the same procedure, i.e., Presidential order based on CAG’s advice.

Additional Comments

  • Before 1976, the CAG was also responsible for compiling the accounts of the Union and States, in addition to auditing them and prescribing their form.
  • Through the Comptroller and Auditor-General’s (Duties, Powers and Conditions of Service) Act, 1971, as amended in 1976, the responsibility for compiling the accounts of the Union Government was transferred from the CAG to the respective ministries/departments, with the Controller General of Accounts (CGA) now playing a key role under the Department of Expenditure, Ministry of Finance.
  • However, the CAG continues to compile the accounts of most state governments (except for a few states that have taken over this responsibility) and remains responsible for prescribing the form of accounts for both the Union and States under Article 150.
  • The form prescribed under Article 150 is detailed in the “List of Major and Minor Heads of Accounts of Union and States” and other related account codes and manuals.
  • Understanding Article 150 is important for comprehending the broader framework of financial accountability and auditing in India, linking the executive, legislature, and the auditing authority.

Summary

Article 150 of the Indian Constitution stipulates that the form in which the accounts of the Union and the States are kept shall be prescribed by the President of India. Crucially, the President exercises this power solely based on the advice of the Comptroller and Auditor-General of India. This constitutional provision vests the technical authority for determining government accounting standards in the CAG, ensuring uniformity and facilitating proper financial management and audit across both central and state governments. It underscores the CAG’s role beyond mere auditing, extending to the foundational structure of government financial record-keeping.
« Article 145 Article 151 »