Odisha Ranked as Top-Performing State in Niti Aayog’s Fiscal Health Index 2025

Bhubaneswar: Odisha has emerged as the top-performing state in the country in terms of fiscal stability, as per Niti Aayog’s Fiscal Health Index (FHI) 2025 report.

Odisha leads the Fiscal Health Index with a top score of 67.8, excelling in the Debt Index (99.0) and Debt Sustainability (64.0). The state maintains low fiscal deficits, a strong debt profile, and a high Capital Outlay/GSDP ratio. Chhattisgarh (55.2) and Goa (53.6) follow, excelling in Debt Index and Revenue Mobilization, respectively, the Niti Aayog report stated.

The report, which evaluates the fiscal health of 18 major states, aims to provide a comparative analysis of fiscal management, debt sustainability, and revenue mobilisation across India.

The Fiscal Health Index (FHI) 2025 highlights significant disparities in the fiscal management of Indian states, with Odisha, Chhattisgarh, and Goa emerging as top performers due to their strong debt sustainability and revenue mobilisation strategies.

These states have effectively leveraged non-tax revenue sources, with mining premiums and coal block auctions contributing to an average of 21 per cent of their total revenue. In contrast, states such as Punjab, Andhra Pradesh, West Bengal, and Kerala face serious fiscal challenges, including low expenditure quality, poor debt sustainability, and high fiscal deficits, which threaten their long-term financial stability, the report added.

Effective debt management remains a key differentiator among states, with Odisha, Madhya Pradesh, Goa, Karnataka, and Uttar Pradesh prioritising capital investment, allocating around 27 per cent of their developmental expenditure to capital projects.

The states such as West Bengal, Andhra Pradesh, Punjab, and Rajasthan have low capital expenditure levels, at just 10 per cent, raising concerns about their ability to sustain future economic growth, the report highlighted.