NITI Aayog Fiscal Health Index 2026

NITI Aayog recently released the second edition of the Fiscal Health Index (FHI) 2026, evaluating state finances for FY 2023-24.

The assessment is based on five pillars: quality of expenditure, revenue mobilization, fiscal prudence, debt index, and sustainability.

Aspect	Details
Expanded Scope	For the first time, the index included 10 North-Eastern and Himalayan states along with 18 major states, making the assessment more inclusive of India’s fiscal diversity.
Top Performers	Odisha retained the top position, followed by Chhattisgarh, Goa, and Jharkhand. These states were categorized as “Achievers” due to strong revenue mobilization and disciplined debt management.
Bottom Performers	Punjab, West Bengal, and Kerala remained at the bottom due to high committed expenditures such as pensions and interest payments, along with unsustainable debt levels.
NE & Himalayan States	Arunachal Pradesh emerged as the leading state in this category, while Himachal Pradesh and Manipur ranked lowest due to weak own-revenue generation.
Highest Debt-to-GSDP	States with the highest debt-to-GSDP ratios were Punjab (40.35%), Nagaland (37.15%), and West Bengal (33.70%).
Lowest Debt-to-GSDP	The lowest debt-to-GSDP ratios were recorded by Odisha (8.45%), Maharashtra (14.64%), and Gujarat (16.37%).
Debt Trends	Eight states recorded debt levels above 30% of GSDP, while six states maintained debt below 20%.
Debt vs Revenue Capacity	On average, states’ debt stood at nearly 150% of revenue receipts, peaking at 191% in 2020-21 during the Covid-19 period.
Gross State Domestic Product	Gross State Domestic Product (GSDP) refers to the total monetary value of all final goods and services produced within a state during a specific period, usually one year, without duplication. It is the most important indicator used to measure the economic growth and development of a state.

PT Facts

NITI Aayog: Set up on 1 January 2015, replacing the Planning Commission.
High Debt-to-GSDP: Indicates greater fiscal stress on states.
Capital Expenditure: High debt can reduce states’ ability to spend on development projects.
Fiscal Rankings: Improve with higher own tax revenue and lower committed expenditure.
Finance Commission: Transfers and centrally sponsored schemes influence state fiscal performance.
GSDP: State-level counterpart of the national GDP.

Source:

Join Our Telegram

AI Impact Summit 2026 UPSC GS-3 S&T PT-MAINS

India’s Indo-Pacific Oceans Initiative (IPOI) UPSC GS-2 INDO PACIFIC – IR/PSIR

20 Nov, 25
SHARE

India’s Indo-Pacific Oceans Initiative (IPOI) UPSC GS-2 INDO PACIFIC – IR/PSIR IPOI is India’s open, voluntary and non-treaty-based maritime initiative for building a free, open, inclusive and rules-based Indo-Pacific through practical cooperation. Why in News? India’s Indo-Pacific Oceans Ini

AI Impact Summit 2026 UPSC GS-3 S&T PT-MAINS

19 May, 26
SHARE

AI Impact Summit 2026 UPSC GS-3 S&T PT-MAINS The India-AI Impact Summit 2026 positioned India as a Global South leader by shifting global AI debate from only AI safety and regulation to AI for development, inclusion and real-world impact. Why in News? India hosted the India-AI Impact Summit 2026 at B

Hong Kong Convention for Safe Ship Recycling UPSC GS-3 ENVIRONMENT PT-MAINS

27 Jun, 25
SHARE

Hong Kong Convention for Safe Ship Recycling UPSC GS-3 ENVIRONMENT PT-MAINS The Hong Kong International Convention, 2009 is an IMO treaty that ensures ships are recycled safely without unnecessary risk to human health, worker safety and the environment. Why in News? The Hong Kong Convention entered into force on 26 June 2

LeadIT 2.0: Leadership Group for Industry Transition COP28 UPSC GS-2 IR GS-3 S&T

14 Nov, 23
SHARE

LeadIT 2.0: Leadership Group for Industry Transition UPSC GS-2 IR GS-3 S&T LeadIT 2.0 is the second phase of the India-Sweden-led global initiative to support low-carbon transition in hard-to-abate industrial sectors. Why in News? The second phase of LeadIT was announced at the LeadIT Summit 2023, ho

India-EFTA Trade and Economic Partnership Agreement UPSC GS-2 IR/PSIR

03 Sep, 25
SHARE

India-EFTA Trade and Economic Partnership Agreement UPSC GS-2 IR/PSIR The India-EFTA TEPA is a comprehensive trade pact between India and four non-EU European countries — Iceland, Liechtenstein, Norway and Switzerland — aimed at boosting trade, investment, jobs, services, technology and supply-chain resilience. Wh