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The CAG's Strategic Shift: New Audit Priorities for India's Future

A Comprehensive Overview of CAG's Evolving Audit Focus

The CAG's Strategic Shift: New Audit Priorities for India's Future

  • 17 Nov, 2025
  • 489

Introduction to CAG's New Audit Priorities

On Audit Diwas, celebrated on 16 November, India's Comptroller and Auditor General (CAG) K. Sanjay Murthy unveiled a new set of national audit priorities. This event marks the 166th anniversary of the appointment of India's first Auditor-General in 1860. The updated priorities are designed to align with the national vision of Viksit Bharat 2047 while addressing evolving governance challenges.

Key Audit Focus Areas Announced

Urban Governance Audit

The CAG has revitalized audits of Urban Local Governments (ULGs), recognizing that over 50% of India's population is projected to be urban by 2047. The audit will cover 101 major cities under the theme "Ease of Living," assessing infrastructure, environmental sustainability, service delivery efficiency, and local economic growth. This initiative aims to impact over 40 crore urban citizens and guide policy reforms.

MSME Sector Audit

The audit of the MSME sector focuses on enhancing the ease of doing business. Given their significant contribution to employment, exports, and regional growth, the audit will address paperless processes, government interface efficiency, and grievance-redressal mechanisms. The objective is to identify procedural bottlenecks and boost MSME competitiveness.

Foundational Literacy and Numeracy (FLN) Audit

The CAG emphasizes the importance of human capital development through a pan-India assessment of early-grade learning outcomes. This audit supports the Foundational Literacy and Numeracy Mission, crucial for achieving Viksit Bharat 2047, in alignment with the NEP 2020.

Multimodal Logistics and Indian Railways Audit

Under the PM Gati Shakti framework, a comprehensive review of port connectivity, railways, freight corridors, logistics terminals, and inter-agency coordination is planned. This audit aims to evaluate readiness for seamless multimodal transport and reduce logistics costs through extensive consultations with relevant authorities and operators.

Digital Transformation Initiatives

The CAG has launched the CAG-Connect portal, a real-time digital ecosystem linking 10 lakh auditee entities with audit offices, enhancing traceability, transparency, and workflow efficiency. Additionally, the development of CAG-LLM, an indigenous AI-driven Large Language Model, is underway to unlock institutional knowledge and enable smarter audits.

Capacity Building and Future-Ready Workforce

In partnership with IIT Madras, the CAG is training officers in data science, AI, cybersecurity, and IT auditing. The initiative aims to train 5,000 officers over five years, with 250 already trained, ensuring a future-ready audit workforce.

Significance of Auditing

During the Audit Diwas celebrations, Vice-President C P Radhakrishnan highlighted the CAG's role in promoting transparency, accountability, and good governance in public resource management. He praised the institution's transformation of audit processes into a forward-looking instrument of reform and innovation.

Challenges and Way Forward

  • Address data gaps and digital readiness issues among ULBs and MSME departments.
  • Improve coordination in multimodal logistics across agencies.
  • Ensure cybersecurity and privacy with digital audit tools.
  • Integrate AI systems like CAG-LLM into traditional workflows.
  • Standardize frameworks for measuring Ease of Living and Ease of Doing Business.

Strengthening digital capabilities, institutionalizing AI-supported auditing, expanding audits to include climate resilience, enhancing stakeholder consultations, and building workforce capacity are crucial steps forward.

Conclusion

The CAG's renewed audit priorities signify a proactive, real-time approach to future-ready auditing. By leveraging technology and strengthening institutional capacity, the CAG aims to enhance transparency, accountability, and governance effectiveness in India's journey toward Viksit Bharat 2047.

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