Odisha Tops Niti Aayog’s Fiscal Health Index (FHI) 2025

Odisha has emerged as the state with the strongest fiscal health according to Niti Aayog’s Fiscal Health Index 2025.

Details of the Fiscal Health Index

• The index evaluated the fiscal performance of 18 major states for the year 2022-23.
• Five parameters were considered for the assessment: 
  1. Quality of Expenditure
  2. Revenue Mobilisation
  3. Fiscal Prudence
  4. Debt Index
  5. Debt Sustainability

Performance Highlights

• Top Performers: Odisha, Chhattisgarh, Goa, Jharkhand, and Gujarat.
• Front Runners: Maharashtra, Uttar Pradesh, Telangana, Madhya Pradesh, and Karnataka.
• Performers: Tamil Nadu, Bihar, Rajasthan, and Haryana.
• Aspirational: Kerala, West Bengal, Andhra Pradesh, and Punjab.

Economic Contributions

• The 18 states contribute significantly to India’s GDP, demography, public expenditure, and fiscal stability.
• Top achievers have high capital outlay (up to 4% of GSDP) and effective non-tax revenue mobilisation.
• These states are revenue surplus and have low interest payments.

Changes in Rankings

• Karnataka fell from third to tenth position, and Andhra Pradesh from 13th to 17th position compared to their average ranking between 2014-15 and 2021-22.
• Chhattisgarh improved from fifth to second position, Jharkhand from tenth to fourth, and Rajasthan from 15th to 12th rank.

Significance of FHI

Niti Aayog vice chairman, Suman Bery, stated that the Fiscal Health Index provides a roadmap for achieving fiscal consolidation, improving transparency, and fostering effective resource management.