Odisha Tops NITI Fiscal Health Index, Chhattisgarh Next Best + UPSC?.ToString()?? UPSC?.ToString()+" Current Affairs";

Why in the News?
Odisha has emerged as the top-performing state in the NITI Aayog’s first-ever Fiscal Health Index (FHI) for 2022-23, achieving an impressive score of 67.8. This report evaluates the fiscal performance of 18 major Indian states that significantly contribute to the country’s economy. Chhattisgarh, Goa, and Jharkhand were also recognized as achievers, while Punjab, Andhra Pradesh, West Bengal, and Kerala ranked at the bottom.
Aim
The Fiscal Health Index aims to provide a comprehensive assessment of states' fiscal performance and stability, helping policymakers identify strengths and areas for improvement. It measures states based on fiscal parameters such as revenue generation, expenditure quality, debt sustainability, and fiscal management.
Key Takeaways
Top Performers: Odisha, Chhattisgarh, Goa, Jharkhand, and Maharashtra scored high due to revenue surplus, low fiscal deficits, and effective non-tax revenue mobilization. These states also recorded high capital outlay, up to 4% of their Gross State Domestic Product (GSDP).
Front-Runners: States like Maharashtra, Uttar Pradesh, Telangana, Madhya Pradesh, and Karnataka excelled in developmental expenditure, balanced fiscal management, and sustainable debt ratios of 24% of GSDP.
Struggling States: Punjab, Andhra Pradesh, West Bengal, and Kerala face significant fiscal challenges. These "aspirational" states are grappling with low revenue generation, high fiscal deficits, and unsustainable debt burdens.
Odisha’s Standout Performance: Odisha topped the debt index (99.0) and debt sustainability (64.0), maintaining low fiscal deficits and a robust debt profile.
Do You Know?
The Fiscal Health Index 2025 is the first report of its kind from NITI Aayog.
Data used for the report were sourced from the Comptroller and Auditor General (CAG).
Odisha’s capital outlay-to-GSDP ratio and effective revenue mobilization contributed significantly to its top ranking.
The top-performing states reported developmental expenditure as high as 73% of total expenditure.
Static Points About NITI Fiscal Health Index
Purpose: The FHI helps assess the financial health of Indian states to guide policymakers.
Methodology: States are ranked based on parameters such as revenue surplus, debt sustainability, fiscal deficit, and capital outlay.
Categories: States were classified into four groups: Achievers, Front-Runners, Performers, and Aspirational States.
Achiever:
Jharkhand (4)
Chhattisgarh (2)
Gujarat (5)
Odisha (1)
Front-runner:
Uttar Pradesh (7)
Maharashtra (6)
Goa (3)
Karnataka (10)
Telangana (8)
Madhya Pradesh (9)
Performer:
Tamil Nadu (11)
Rajasthan (12)
Bihar (13)
Haryana (14)
Aspirational:
Kerala (15)
West Bengal (16)
Andhra Pradesh (17)
Punjab (18)
Fine Balance:
Analysis in the Niti Aayog’s report on the fiscal health index for FY23 highlights that strong revenue mobilisation, effective expenditure management, and prudent fiscal practices are critical determinants of success.
Insightful Observation
Odisha's consistent fiscal discipline and effective governance set a benchmark for other states. The FHI highlights the importance of prudent fiscal management in achieving sustainable economic growth and development. Policymakers should leverage this data to address fiscal disparities and strengthen the financial health of struggling states.

About NITI Aayog:
Formed: 1 January 2015
Headquarters: New Delhi    
Chairperson: PM (Current Chairperson - Narendra Modi)
Vice Chairperson: Suman Bery
CEO: B. V. R. Subrahmanyam
Parent Government Agency: Ministry of Planning