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Odisha and Chhattisgarh have performed brilliantly in NITI Aayog’s Fiscal Health Index (FHI) 2025 report. This report shows which states are spending their money well and how they are developing their regions.
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Odisha tops the list among 18 states with a score of 67.8. Chhattisgarh is at second place with a score of 55.2 and Goa is at third place with a score of 53.6. 16th Finance Commission Chairman Arvind Panagariya released the first issue of the NITI Aayog report in New Delhi on Friday. The Fiscal Health Index (FHI) aims to shed light on the fiscal position at the sub-national level and guide policy reforms for sustainable and resilient economic growth. Successful states have demonstrated strong fiscal health, and have excelled in revenue mobilization, expenditure management and debt sustainability. Jharkhand saw a good recovery, strengthening fiscal prudence and debt sustainability. Karnataka has suffered a decline due to poor performance in expenditure quality and debt management. These inter-state disparities highlight the need for targeted reforms to address specific fiscal challenges and ensure sustainable growth. Panagariya, Chairman of the 16th Finance Commission, said states need to adopt a stable fiscal path for balanced regional development, long-term fiscal sustainability and prudent governance.
Evaluation was done on five points
The report provided a comprehensive assessment of the fiscal health of 18 major states based on five key points – quality of expenditure, revenue mobilization, fiscal prudence, debt index and debt sustainability. Information about state-specific challenges and areas for improvement was also given.
UP, MP, Karnataka, Telangana kept in leading category
Uttar Pradesh, Madhya Pradesh, Maharashtra, Telangana, Karnataka have been listed in the leading category in this report prepared with the aim of developing understanding about the fiscal health of the states. According to the report, Punjab, Andhra Pradesh, West Bengal and Kerala are the worst performing states and all face significant economic challenges.