Odisha Tops NITI Aayog’s Fiscal Health Index

Why in the news?

NITI Aayog’s first Fiscal Health Index ranked Odisha as the top performer for FY 2022-23, excelling in fiscal management and debt sustainability, while Punjab, Kerala, West Bengal, and Andhra Pradesh ranked lowest due to fiscal challenges.

Odisha Tops NITI Aayog’s Fiscal Health Index

Top Performers in Fiscal Health Index (FHI):

  • Odisha, Chhattisgarh, Goa, and Jharkhand emerged as the top-performing “Achiever” States in NITI Aayog’s first Fiscal Health Index (FHI) for FY 2022-23.
  • Odisha ranked first, achieving the highest index score of 8, excelling in debt management, capital outlay, and fiscal stability.
  • Maharashtra, Uttar Pradesh, Telangana, Madhya Pradesh, and Karnataka were classified as “Front-Runners”, showcasing high developmental expenditure and strong tax revenue growth.

Key Findings from the Report:

  • States were ranked based on their contributions to GDP, revenue generation, fiscal stability, and expenditure management.
  • Kerala, West Bengal, Andhra Pradesh, and Punjab were the worst performers, listed under the “Aspirational” category, struggling with fiscal and revenue deficits, poor debt sustainability, and low revenue mobilisation.
  • Tamil Nadu, Bihar, Rajasthan, and Haryana were placed in the “Performer” category, indicating moderate fiscal health.
  • The Himalayan and northeastern States were excluded from the report.

Insights into Fiscal Success:

  • Top-performing States demonstrated:
    • Higher capital outlay (up to 4% of GSDP).
    • Effective non-tax revenue mobilisation.
    • Balanced debt-to-GSDP ratios (around 24%).
  • Aspirational States faced challenges with increasing debt burdens and fiscal deficits.
  • The report, based on data from the Comptroller and Auditor General (CAG), highlighted Odisha’s consistent fiscal discipline and low deficit levels as key contributors to its success.

Sources Referred:

PIB, The Hindu, Indian Express, Hindustan Times