Published: 15 December 2025CAG IndiaGovernance
CAG-ICSSR 2nd Colloquium on Public Finances of States: Fiscal Federalism in Focus
The Comptroller and Auditor General (CAG) of India and the Indian Council of Social Science Research (ICSSR) jointly organised the 2nd Colloquium on Public Finances of States on December 15, 2025. The Chief Guest was Shri Suman Bery and brought together leading economists, policy makers, and researchers to deliberate on state government finances, fiscal federalism, and the health of sub-national fiscal systems in India.
The colloquium focussed on several critical themes including the growing debt burden of states, off-balance-sheet borrowings, quality of capital expenditure, and the implications of revenue shortfalls on social sector spending. Fiscal federalism — the division of financial powers and responsibilities between the Centre and states — was a central theme, with deliberations on the 16th Finance Commission recommendations and the distribution of divisible pool resources.
Rajasthan was identified as one of the high fiscal deficit states in the country. The state has a revenue expenditure-dominated budget with limited capital formation, and its debt-to-GSDP ratio has been a concern for fiscal managers. The colloquium also addressed the issue of state guarantees to Public Sector Enterprises and their contingent liability implications.
The CAG plays a constitutional role in auditing state finances under Articles 149-151 of the Indian Constitution. The ICSSR-CAG collaboration aims to build an academic evidence base for better public financial management. The inaugural session was held in November 2025, establishing this as an annual event. For RPSC aspirants, this topic is relevant to Indian polity (Centre-State financial relations, Finance Commission), public administration, and Rajasthan's fiscal challenges.
Mains angle
Q: Evaluate the themes of the 2nd CAG-ICSSR Colloquium on Public Finances of States and Rajasthan's position within India's fiscal federal framework.
Answer (50 words):
The 2nd CAG-ICSSR Colloquium on Public Finances of States, held on 16 December 2025 chaired by CAG Sanjay Murthy, addressed state debt, off-balance-sheet borrowings, revenue shortfalls, and the 16th Finance Commission framework. Rajasthan was identified as a high fiscal deficit state. CAG's audit role under Articles 149-151 underpins cooperative fiscal federalism.
6-axis classification
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Frequently asked questions
Who chaired the 2nd CAG-ICSSR Colloquium on Public Finances of States?
The 2nd Colloquium was chaired by Comptroller and Auditor General (CAG) of India, Sanjay Murthy, and was held on December 16, 2025.
What is fiscal federalism and why was it a focus of this colloquium?
Fiscal federalism refers to the division of financial powers, resources, and responsibilities between the Centre and state governments. It was a focus because state finances have come under stress due to growing debt, off-budget borrowings, and dependence on central transfers.
Under which articles of the Indian Constitution does the CAG audit state finances?
The CAG audits state finances under Articles 149-151 of the Indian Constitution. Article 149 defines CAG's duties and powers, and Articles 150-151 deal with the form of accounts and audit reports to state legislatures.
Why is Rajasthan highlighted as a high fiscal deficit state?
Rajasthan has a revenue expenditure-dominated budget with limited capital formation, a high debt-to-GSDP ratio, and significant guarantees to Public Sector Enterprises, making it one of the states with persistent fiscal stress.
What is the significance of the ICSSR-CAG collaboration?
The ICSSR-CAG collaboration builds an academic evidence base for better public financial management by bringing together economists, researchers, and policy makers to analyse state finances and suggest reforms for fiscal sustainability.
