In the Indian system of governance, the policies are set by the parliament and the state legislators give the goals to be achieved through the public spending. These policies are then translated into programs and then implemented by various department of government. For this, Parliament sanctions the budget detailing the mode of collection, amount of collection and also for the purpose for it is to be spent. There are also financial rules which the Government departments and other public bodies must follow when they receive and spend public money.
The government departments are accountable for the quantity and quality of their expenditure to the Parliament. CAG assists the Parliament to enforce accountability of the Government.
Articles 148 to 151 of the Constitution ensure the independence of Comptroller & Auditor General of India while discharging his/her constitutional responsibilities. These provisions describe the terms of appointment, removal, salary, terms and conditions of the service of the Comptroller & Auditor General of India.