The Hon’ble Chairman of the 16th Finance Commission, Dr. Arvind Panagariya, launched the inaugural issue of NITI Aayog’s report titled “Fiscal Health Index (FHI) 2025” on 24th January 2025 in New Delhi.

• The report provides a comprehensive assessment of the fiscal health of 18 major States, based on five key sub-indices: Quality of Expenditure, Revenue Mobilisation, Fiscal Prudence, Debt Index, and Debt Sustainability, along with insights into state-specific challenges and areas for improvement.
• Odisha tops the ranking in fiscal health among 18 major States with a cumulative score of 67.8., followed by Chhattisgarh and Goa with scores of 55.2 and 53.6, respectively. 
• The achiever States display strong fiscal health, excelling in revenue mobilization, expenditure management, and debt sustainability.
• Improvements are seen in states like Jharkhand, which has strengthened fiscal prudence and debt sustainability, while Karnataka faces a decline due to weaker performance in expenditure quality and debt management.
• These interstate disparities highlight the need for targeted reforms to address specific fiscal challenges and ensure sustainable growth.