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
- 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
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%
- 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
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.
