Fiscal Health Index 2025

The NITI Aayog released its first Fiscal Health Index (FHI) report, ranking 18 major Indian states based on their fiscal health for the year 2022-23. The index aims to provide an understanding of the states' fiscal stability, revenue generation, and expenditure management.

Top-Performing States

• Achievers: Odisha, Chhattisgarh, Goa, and Jharkhand
• Key Characteristics:
   
  • High capital outlay up to 4% of Gross State Domestic Product (GSDP)
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  • Effective mobilisation of non-tax revenue
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  • Revenue surplus status
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  • Low interest payments, up to 7% of revenue receipts
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• Odisha's Performance:
   
  • Highest overall index score of 67.8
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  • Top scores in debt index (99.0) and debt sustainability (64.0)
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  • Maintained low fiscal deficits and a strong debt profile
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Other Categories

• Front-Runners: Maharashtra, Uttar Pradesh, Telangana, Madhya Pradesh, Karnataka
   
  • High developmental expenditure, up to 73%
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  • Consistent growth in own tax revenue
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  • Balanced fiscal management
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  • Improved debt sustainability with a debt-to-GSDP ratio of 24%
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• Performers: Tamil Nadu, Bihar, Rajasthan, Haryana
• Aspirational States: Punjab, Andhra Pradesh, West Bengal, Kerala
   
  • Struggling with fiscal and revenue deficit targets
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  • Low revenue mobilisation
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  • Increasing debt burden and concerns over debt sustainability
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Challenges Faced by Aspirational States

• Kerala and Punjab: Low quality of expenditure and debt sustainability
• West Bengal: Issues with revenue mobilisation and debt index
• Andhra Pradesh: High fiscal deficit
• Haryana: Poor debt profile

Data and Analysis

• Data for the index is sourced from the Comptroller and Auditor General (CAG).
• Odisha, Goa, Karnataka, Maharashtra, and Chhattisgarh had the highest average FHI scores from 2014-15 to 2021-22.