In a landmark assessment by NITI Aayog, the Fiscal Health Index (FHI) 2025 has showcased the economic resilience and fiscal management capabilities of Indian states. Odisha emerged as the frontrunner, thanks to its robust debt sustainability measures and innovative revenue generation strategies.
The FHI evaluated states based on five key indicators: tax buoyancy, revenue mobilization, debt-to-GSDP ratio, expenditure prioritization, and fiscal deficit management. Odisha’s leading position is attributed to its ability to balance developmental expenditure with fiscal discipline, particularly excelling in non-tax revenue mobilization from mining premiums.
Meanwhile, states like Punjab and West Bengal face challenges such as high fiscal deficits and low capital expenditure, raising concerns about long-term sustainability. The FHI report underscores the critical need for efficient fiscal practices and tailored interventions to address state-specific challenges.
The report aims to promote fiscal transparency and accountability, offering a roadmap for sustainable economic growth. It has been shared with all states and union territories to encourage the adoption of best practices in fiscal governance.
