The Comptroller and Auditor General (CAG) of India does not normally audit the receipts and expenditure of which of the following bodies?

Introduction / Context:
The Comptroller and Auditor General (CAG) of India is a constitutional authority responsible for auditing the accounts of the Union and State governments and certain public sector entities. Understanding the scope of the CAG's audit jurisdiction is a routine topic in Indian polity and public finance questions. This MCQ asks which body's receipts and expenditure are not ordinarily audited directly by the CAG, unless special provisions or requests exist.

Given Data / Assumptions:

• The question lists four types of entities: Central Government, State Government, local bodies, and government companies.
• We know the CAG is established under Articles 148–151 of the Constitution.
• The phrase "does not audit" refers to the normal constitutional and statutory mandate, not exceptional arrangements.
• Local bodies here refer to Panchayati Raj Institutions and Municipalities at the grassroots level.

Concept / Approach:
The CAG primarily audits the accounts of the Union and State governments, including receipts and expenditure from the Consolidated Funds and public accounts. It also audits many government companies and corporations in which the government has significant ownership. However, the accounts of local bodies like panchayats and municipalities are typically audited by state level audit agencies or Local Fund Audit Departments. In some States, the CAG may conduct technical or sample audits of local bodies or act as a nodal authority, but this is not its core, universal obligation under the Constitution for all local bodies. Hence, among the options, local bodies are the ones whose receipts and expenditure are not normally audited fully and directly by the CAG.

Step-by-Step Solution:
Step 1: Recall that Articles 149 and 151 give the CAG authority over Union and State government accounts.Step 2: Recognise that the CAG prepares audit reports on the Union and State accounts, which are then laid before Parliament and State Legislatures.Step 3: Note that government companies and corporations in which the government holds a majority stake are also subject to CAG audit under relevant laws.Step 4: Understand that the detailed audit of local self government institutions is generally handled by state level audit mechanisms, with only limited or sample involvement from the CAG in some cases.Step 5: Therefore, identify local bodies such as Panchayats and Municipalities as the correct answer to the question about entities not normally audited by the CAG.

Verification / Alternative check:
Public finance and polity textbooks clearly state that the CAG audits the accounts of the Union and State governments and many government companies. They also mention that the audit of Panchayats and Municipalities is usually the responsibility of separate Local Fund Audit offices, though the CAG may provide guidelines or conduct test audits. Exam book MCQs almost always treat local bodies as outside the CAG's core audit remit, particularly when compared to central and state governments and government companies. This makes local bodies the standard correct choice in questions like this.

Why Other Options Are Wrong:

• Central Government: The CAG is specifically mandated to audit the accounts of the Union government, so this option is incorrect.
• State Government: The CAG also audits the accounts of State governments, and its reports are laid before State Legislatures.
• Government companies: Most government companies, especially those where the government holds more than 51 percent of share capital, fall under the CAG's audit jurisdiction.

Common Pitfalls:
Students sometimes assume that because local bodies are public institutions, the CAG must audit them directly just like Union and State accounts. This overlooks the specific constitutional and statutory arrangements that assign their audit mostly to state level agencies. Another mistake is to think that government companies are private enterprises and therefore outside the CAG's reach, whereas in reality the CAG plays a significant role in auditing public sector undertakings. Always remember that in typical exam questions, local bodies are the entity not audited by the CAG in the same comprehensive way as the Union, States and government companies.

Final Answer:
The CAG of India does not normally audit the receipts and expenditure of local bodies such as Panchayats and Municipalities.