CAG’s AI Adoption & Reforms

18.09.2025

CAG’s AI Adoption & Reforms

Context

The Comptroller and Auditor General (CAG) of India has introduced an AI-powered Large Language Model (LLM) to drastically improve audit efficiency and accuracy in government financial oversight. This marks a significant shift in India’s approach to public fund auditing and accountability.

About CAG & the AI Innovation

• CAG’s Role: Established under Article 148 of the Constitution, CAG is the guardian of the public purse, independently auditing government expenditure and reporting to the President (Centre) or Governor (States).
• Appointment and Tenure: Appointed by the President of India; tenure of 6 years or up to age 65, whichever comes first.
• Functions: Audits all government expenditures, contingency funds, and public accounts, with reports examined by the Public Accounts Committee.
• Reform Highlights: CAG has now launched an AI-based LLM for auditing—enabling rapid, comprehensive analysis of massive datasets and enhancing accuracy, speed, and transparency in public financial management.

Key Features

• Streamlines audit reporting, replacing manual processes with AI-driven automation.
• Connect portal launched—integrates and supports nearly 1 million auditing entities.
• AI minimises errors, accelerates report preparation, and facilitates deeper analytical insights for government oversight.

Significance

• Augments accountability of public spending.
• Ensures audits are thorough and timely, bridging gaps caused by human resource limitations.
• Sets a precedent for AI adoption in India's constitutional and regulatory bodies.

Challenges

• AI integration requires robust data security and technical infrastructure.
• Staff upskilling and transition management are crucial for smooth adoption.
• Must ensure transparency, minimize bias, and maintain independent oversight.

Way Forward

• Promote digital infrastructure and capability building in government departments.
• Expand AI use to other oversight bodies for comprehensive governance reform.
• Strengthen cyber security and audit data privacy standards.

Conclusion

CAG’s deployment of AI elevates the autonomy, accuracy, and relevance of India’s public audits. Digital reforms promise greater transparency and efficiency in governance, supporting constitutional mandates and strengthening trust in public financial management.