In a recent report by NITI Aayog, Odisha, Chhattisgarh, Goa, and Jharkhand were named the top-performing states among 18 major Indian states. These states were recognized for their significant contributions to India’s GDP, population, public spending, revenues, and overall financial stability.
The report, which is the first of its kind, was released by Arvind Panagariya, Chairman of the 16th Finance Commission, during an event in New Delhi on Friday.
These Indian states play a crucial role in distributing resources to key areas like agriculture, poverty reduction, human development, urbanization, and infrastructure. Proper financial management in these sectors can drive growth, improve social welfare, and help reduce economic differences between regions.
Fiscal Health Index 2025
According to NITI Aayog’s Fiscal Health Index (FHI) 2025 report, released on January 24, 2025, Odisha, Chhattisgarh, Goa, and Jharkhand have consistently been the top performers across various periods analyzed in the study. These states continue to lead in fiscal health for the financial year 2022-23, marking their strong economic performance. Followed by these five states are Maharashtra, Uttar Pradesh, Telangana, Madhya Pradesh, and Karnataka.
Performance of Indian states
Odisha leads in fiscal health with the highest overall index score of 67.8. The state shines in the Debt Index (99.0) and Debt Sustainability (64.0) rankings, while also scoring above average in Quality of Expenditure and Revenue Mobilisation.
Its low fiscal deficits, strong debt profile, and substantial capital outlay relative to its Gross State Domestic Product (GSDP) contribute to its robust fiscal standing.
After Odisha, Chhattisgarh and Goa follow with scores of 55.2 and 53.6, respectively. Chhattisgarh stands out for its impressive debt index, while Goa excels in revenue mobilisation.
Both states have shown a strong balance between expenditure and revenue, showcasing effective fiscal management and discipline.
Jharkhand has made great progress in improving its fiscal health, moving up to 4th place in FY 2022-23 from 10th place in the 2015-19 to 2021-22 period. This improvement is due to better revenue collection, smarter spending, and stronger debt management.
Maharashtra, Uttar Pradesh, Telangana, Madhya Pradesh, and Karnataka are classified as ‘front-runners.’
On the opposite end, Punjab, Andhra Pradesh, West Bengal, and Kerala are marked as the worst-performing states and are categorized as ‘aspirational’ due to serious fiscal challenges.
Punjab and Kerala face difficulties with poor expenditure quality and debt sustainability, while West Bengal struggles with revenue collection and debt issues. Andhra Pradesh is dealing with a significant fiscal deficit, and Haryana is hindered by a weak debt profile, worsening its financial situation.