New Delhi, Jan 25: Odisha, Chhattisgarh, and Goa have taken the lead in NITI Aayog’s Fiscal Health Index (FHI) 2025.

The FHI 2025, launched by the Chairman of the 16th Finance Commission, Dr. Arvind Panagariya in New Delhi, provides a comprehensive assessment of the fiscal health of 18 major States.

The States have been assessed 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.

With a cumulative score of 67.8, Odisha tops the ranking in fiscal health among 18 major States. It is followed by Chhattisgarh (55.2) and Goa (53.6). The report also marked improvements in Jharkhand, which has strengthened fiscal prudence and debt sustainability.

However, Karnataka faced 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.

“The Fiscal Health Index report will be an annual publication focusing on the fiscal health of Indian states, offering data-driven insights that will be leveraged for informed state-level policy interventions to improve overall fiscal governance, economic resilience, and stability of the nation,” said BVR Subrahmanyam, CEO, NITI Aayog.

The FHI aims to throw light on the fiscal status at the sub-national level and guide policy reforms for sustainable and resilient economic growth.

“States must follow a stable fiscal path for balanced regional development, long-term fiscal sustainability, and prudent governance,” said Panagariya, while launching the report.

“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. It 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,” he added.

By focusing on major fiscal indicators, the FHI encourages states to align their fiscal strategies with national objectives, ensuring their contributions to the goal of a fiscally stable and prosperous India and, most importantly, promoting healthy competition among states.

Subrahmanyam stressed that the FHI's findings are aligned with India’s broader vision of achieving “Viksit Bharat @2047,” where fiscal discipline at the state level plays a pivotal role in the nation’s economic transformation.

--IANS

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