Odisha Leads in Fiscal Health: NITI Aayog's First 'Fiscal Health Index 2025' Unveiled

Odisha tops the inaugural 'Fiscal Health Index 2025' by NITI Aayog, scoring 67.8 among 18 major states. The report assesses fiscal health based on five sub-indices. Chairman Arvind Panagariya highlights its role in guiding policy reforms for sustainable growth. States face varied fiscal challenges needing targeted reforms.

In a landmark announcement, Odisha has emerged as the leader in fiscal health among 18 major states, according to the inaugural 'Fiscal Health Index 2025' report by NITI Aayog. With a cumulative score of 67.8, Odisha leads, while Chhattisgarh and Goa follow with scores of 55.2 and 53.6, respectively. The report was launched by the 16th Finance Commission's Chairman, Arvind Panagariya, in New Delhi.

This comprehensive report evaluates the fiscal health of states based on five critical sub-indices: Quality of Expenditure, Revenue Mobilisation, Fiscal Prudence, Debt Index, and Debt Sustainability. It aims to highlight sub-national fiscal status and direct policy reforms towards sustainable, resilient economic growth. Variations in state performance indicate significant reform opportunities, such as Jharkhand's progress in fiscal prudence and Karnataka's struggles in expenditure and debt management.

Arvind Panagariya, underscoring the report's importance, stressed that states must adhere to a stable fiscal path to ensure balanced regional development and fiscal sustainability. The 'Fiscal Health Index' provides vital insights into state-level fiscal trends and promotes a shared responsibility for national prosperity. This annual series is poised to facilitate informed policymaking by spotlighting states' fiscal health for targeted intervention.

(With inputs from agencies.)