What’s in the news?

• NITI Aayog has released its first Fiscal Health Index (FHI) report titled ‘Fiscal Health Index 2025’. 
• The report ranked States for 2022-23, covering 18 major States that drive the Indian economy in terms of their contribution to India’s GDP, demography, total public expenditure, revenues, and overall fiscal stability.
• The report aims to evolve an understanding of the fiscal health of States in the country.

Highlights of the Report

• • As per the report, Odisha excelled in fiscal health with the highest overall index score of 67.8.
  • The report has listed Maharashtra, Uttar Pradesh, Telangana, Madhya Pradesh, Karnataka under ‘front-runners’ category.
    • These States have higher capital outlay of up to 4% of Gross State Domestic Product (GSDP), effective mobilisation of non-tax revenue, are revenue surplus and have low interest payments, which is up to 7% of revenue receipts.
  • Mineral-rich Odisha, Chhattisgarh, Goa and Jharkhand have emerged as top-performing ‘achievers’ among the States.
  • Punjab, Andhra Pradesh, West Bengal, and Kerala were the worst-performing States in FHI, each facing significant fiscal challenges, and listed under the ‘aspirational’ category.

• The aspirational States are struggling to meet the fiscal and revenue deficit targets, have low revenue mobilisation, witnessing a growing debt burden with debt sustainability a concern in these States.

• Tamil Nadu, Bihar, Rajasthan and Haryana were classified as performers.
• Odisha, Goa, Karnataka, Maharashtra and Chhattisgarh scored the highest average FHI score for 2014-15 to 2021-22 period. 
  • The data used to calculate the Fiscal Health Index is sourced from the Comptroller and Auditor General (CAG).

https://www.thehindu.com/business/Economy/odisha-chhattisgarh-goa-among-top-performing-states-in-niti-aayogs-fiscal-health-index/article69137406.ece