Fiscal Health Index 2025:
The Chairman of the 16th Finance Commission launched the inaugural issue of NITI Aayog’s report titled “Fiscal Health Index (FHI) 2025” in New Delhi.
Key Highlights of the Report:
- With a cumulative score of 67.8, Odisha tops the ranking, followed by Chhattisgarh and Goa with scores of 55.2 and 53.6, respectively.
- The achiever States display strong fiscal health, excelling in revenue mobilization, expenditure management, and debt sustainability.
- Improvements are seen in States like Jharkhand, which has strengthened fiscal prudence and debt sustainability, while Karnataka faces 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.
- Punjab, Andhra Pradesh, West Bengal and Kerala were the worst-performing States in the Fiscal Health Index (FHI), each facing significant fiscal challenges, and listed under “aspirational” category.
- It has listed Maharashtra, Uttar Pradesh, Telangana, Madhya Pradesh, Karnataka under the “front-runners” category.
- Tamil Nadu, Bihar, Rajasthan, and Haryana were classified as performers.
Fiscal Health Index:
- It provides a comprehensive assessment of the fiscal health of 18 major States of India.
- It is 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.
