Fiscal Health Index 2025
Fiscal Health Index 2025: The NITI Aayog has recently released its first Fiscal Health Index (FHI).
- About the Top-Performing States:
o Achievers: Odisha, Chhattisgarh, Goa, Jharkhand.
ü Odisha topped with the highest overall index score of 67.8.
o Report Coverage: Covers 18 major States contributing significantly to India's GDP, demography, public expenditure, revenues, and fiscal stability.
- Category Rankings:
o Achievers: Mineral-rich States with high capital outlay and revenue surplus.
o Front-Runners: Maharashtra, Uttar Pradesh, Telangana, Madhya Pradesh, Karnataka.
o Performers: Tamil Nadu, Bihar, Rajasthan, Haryana.
o Aspirational: Punjab, Andhra Pradesh, West Bengal, Kerala (facing fiscal challenges).
- Performance Insights:
o Top Achievers: High capital outlay (up to 4% of GSDP), effective non-tax revenue mobilisation, and low interest payments (up to 7% of revenue receipts).
o Front-Runners: High developmental expenditure (up to 73%), consistent tax revenue growth, and balanced fiscal management with debt-to-GSDP ratio of 24%.
o Aspirational States: Struggling with fiscal and revenue deficit targets and Low revenue mobilisation, high debt burden, and poor debt sustainability.
- State-Specific Observations:
o Odisha: Tops debt index (99.0) and debt sustainability (64.0), maintains low fiscal deficits, strong debt profile, and high capital outlay/GSDP ratio.
o Kerala and Punjab: Low quality of expenditure and poor debt sustainability.
o West Bengal: Faces revenue mobilisation and debt index issues.
o Andhra Pradesh: High fiscal deficit.
o Haryana: Poor debt profile.
- Historical Performance (2014-15 to 2021-22): Highest average FHI scores: Odisha, Goa, Karnataka, Maharashtra, Chhattisgarh.
- Data Source: Data from the Comptroller and Auditor General (CAG).
