New Delhi [India], January 24 : With a cumulative score of 67.8, Odisha tops the ranking in fiscal health among 18 major States, followed by Chhattisgarh and Goa with scores of 55.2 and 53.6, respectively, as per the inaugural issue of NITI Aayog's report titled "Fiscal Health Index (FHI) 2025."
The Chairman of the 16th Finance Commission, Arvind Panagariya, launched the inaugural issue of NITI Aayog's report in New Delhi on Friday.
The report provides a comprehensive assessment of the fiscal health of 18 major States, based on five key sub-indices: Quality of Expenditure, Revenue Mobilisation, Fiscal Prudence, Debt Index, and Debt Sustainability, along with insights into state-specific challenges and areas for improvement.
The Fiscal Health Index (FHI) aims to throw light on the fiscal status at the sub-national level and guide policy reforms for sustainable and resilient economic growth.
The achiever States display strong fiscal health, excelling in revenue mobilization, expenditure management, and debt sustainability.
Improvements are seen in states like Jharkhand, which has strengthened fiscal prudence and debt sustainability, while Karnataka faces a decline due to weaker performance in expenditure quality and debt management. These interstate disparities highlight the need for targeted reforms to address specific fiscal challenges and ensure sustainable growth.
Chairman of the 16th Finance Commission, Panagariya, while launching the report, underscored the need for the States to follow a stable fiscal path for balanced regional development, long-term fiscal sustainability, and prudent governance.
He mentioned that the FHI offers a comprehensive and systematic approach to measuring state-level fiscal performance and provides valuable insights into broader fiscal trends, allowing for a better understanding of fiscal health across the country.
He emphasised that the FHI report helps to promote a more integrated approach to fiscal health and sustainable growth, reinforcing the shared responsibility of both levels of government in achieving national prosperity.
It is further informed that this report marks the launch of an annual series aimed at providing valuable, data-driven insights into the fiscal health of India's states, fostering informed decision-making and policy interventions. The FHI is designed to assist policymakers by offering insights into states' fiscal health and helping identify areas requiring intervention and strategic planning.
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