FHI holds significance as States account for nearly one-third of India’s general government debt and play a key role in delivering key public services, calling for systematic assessment of their finances.
Key Highlights of FHI 2026
- Top Rankers: Odisha remains top performer under Achiever Category.
- It is followed Goa and Jharkhand, also featuring as Achiever states.
- These exhibit high own- tax shares, large capital outlay (4–5% of GSDP), low fiscal deficits (below 3% of GSDP), moderate debt levels, etc.
- Bottom Rankers: Punjab, West Bengal and Kerala exhibiting higher non-developmental expenditure and less sustainable fiscal patterns.
- Inclusion of North-Eastern (NE) and Himalayan States: This edition includes 10 North-Eastern and Himalayan states, evaluated and ranked separately apart from major states.
- Top Rankers: Achievers (Arunachal Pradesh [ranked highest], Uttarakhand),
- Bottom Rankers: Himachal Pradesh and Manipur owing to weak revenues and persistent fiscal stress.
- Policy Priorities for Improving State’s Fiscal Health: Enhancing revenue mobilisation, strengthening own-tax capacity; improving capital expenditure; strengthen public financial management systems, monitor off-budget borrowings, etc.
About Fiscal Health Index (FHI), 2026
- 5- Key Pillars: Quality of Expenditure, Revenue Mobilisation, Fiscal Prudence, Debt Index, and Debt Sustainability categorising major states into categories, namely, Achiever, Front Runner, Performer, Aspirational.
- Uses data from Comptroller and Auditor General (CAG).
- Sub-Indicators: Refined for NE states to capture unique characteristics like difficult terrain, sparse population density, limited own revenue capacity, elevated committed expenditures, greater reliance on Union transfers.
