Union Government
The CAG performs such duties and exercises such powers relating to Union, State, and other authorities' accounts as Parliament prescribes by law, and until then, as were exercisable by the Auditor-General of India immediately before the Constitution's commencement.
This sets out that the CAG's actual audit duties and powers are defined by Parliament through law (the Comptroller and Auditor-General's (Duties, Powers and Conditions of Service) Act, 1971), carrying forward the pre-independence Auditor-General's powers as a starting baseline.
This is the constitutional basis for the CAG's authority to audit not just central government spending, but also state government accounts and the accounts of other government-controlled bodies and public sector undertakings.