Synopsis
Odisha, Chhattisgarh, and Goa have secured the top positions in NITI Aayog’s Fiscal Health Index (FHI) 2025. The index evaluates the fiscal health of major Indian states based on critical financial indicators.Key Takeaways
- Odisha leads the FHI 2025 with a score of 67.8.
- Chhattisgarh and Goa follow with scores of 55.2 and 53.6, respectively.
- The index assesses states on five key sub-indices.
- It aims to guide policy reforms for sustainable growth.
- Fiscal discipline is essential for India’s economic transformation by 2047.
New Delhi, Jan 25 (NationPress) Odisha, Chhattisgarh, and Goa have emerged as frontrunners in NITI Aayog’s Fiscal Health Index (FHI) 2025.
The FHI 2025, which was inaugurated by Dr. Arvind Panagariya, Chairman of the 16th Finance Commission in New Delhi, offers an in-depth evaluation of the fiscal health of 18 significant States.
These States were evaluated on five crucial sub-indices: quality of expenditure, revenue mobilisation, fiscal prudence, debt index, and debt sustainability, along with insights into state-specific challenges and areas for enhancement.
Odisha ranks first with a cumulative score of 67.8 in fiscal health among the 18 major States, followed by Chhattisgarh at 55.2 and Goa at 53.6. The report also highlighted progress in Jharkhand, which has improved its fiscal prudence and debt sustainability.
Conversely, Karnataka experienced a decline due to its subpar performance in expenditure quality and debt management. These regional disparities underscore the necessity for targeted reforms to tackle specific fiscal challenges and promote sustainable growth.
“The Fiscal Health Index report will be an annual publication that emphasizes the fiscal health of Indian states, providing data-driven insights for informed state-level policy interventions aimed at enhancing overall fiscal governance, economic resilience, and national stability,” stated BVR Subrahmanyam, CEO of NITI Aayog.
The FHI seeks to illuminate the fiscal conditions at the sub-national level and inform policy reforms for sustainable and resilient economic growth.
“States are required to maintain a stable fiscal trajectory for balanced regional development, long-term fiscal sustainability, and responsible governance,” remarked Panagariya during the report's launch.
“The FHI offers a thorough and systematic method for evaluating state-level fiscal performance, providing valuable insights into broader fiscal trends, enabling a better understanding of fiscal health across the nation. It fosters a more integrated approach to fiscal health and sustainable growth, reinforcing the shared responsibility of both levels of government in achieving national prosperity,” he added.
By concentrating on major fiscal indicators, the FHI motivates states to align their fiscal strategies with national objectives, ensuring their contributions toward a fiscally stable and prosperous India while fostering healthy competition among states.
Subrahmanyam emphasized that the FHI's findings resonate with India’s broader vision for achieving “Viksit Bharat @2047,” where fiscal discipline at the state level is crucial for the nation's economic transformation.
