New Delhi/Bhubaneswar: Odisha has emerged as the top-performing state in the inaugural Fiscal Health Index (FHI) 2025, launched by the Chairman of the 16th Finance Commission, Dr. Arvind Panagariya, in New Delhi on January 24, 2025.
With a cumulative score of 67.8, Odisha leads the rankings among 18 major states, followed by Chhattisgarh (55.2) and Goa (53.6). The index provides a comprehensive assessment of states’ fiscal health, highlighting Odisha’s strength in revenue mobilization, expenditure quality, and debt sustainability.
The FHI report, unveiled in the presence of NITI Aayog officials including Vice Chairman Suman Bery, Member Dr. Arvind Virmani, CEO B.V.R. Subrahmanyam, and Distinguished Fellow Dr. Anoop Singh, evaluates fiscal health based on five key sub-indices: Quality of Expenditure, Revenue Mobilization, Fiscal Prudence, Debt Index, and Debt Sustainability.
Speaking at the launch, Dr. Panagariya emphasized the importance of maintaining fiscal stability and regional balance for sustainable development. He highlighted the need for states to align fiscal strategies with national goals to achieve long-term economic resilience.
The report highlights significant improvements in states like Jharkhand, which has enhanced fiscal prudence and debt management, while Karnataka saw a decline due to weaker performance in expenditure quality and debt sustainability. Such disparities underline the importance of targeted reforms to address specific fiscal challenges across states.
Suman Bery stressed that the FHI serves as both a ranking and a roadmap, encouraging states to achieve fiscal consolidation and improve resource management. Meanwhile, B.V.R. Subrahmanyam called the FHI a critical tool for policymakers, offering actionable insights to strengthen fiscal resilience and promoting healthy competition among states.
Odisha’s top rank underscores its robust fiscal policies, which align with India’s broader vision of “Viksit Bharat @2047.” The FHI report, which will be an annual series, aims to foster cooperative federalism and guide states toward sustainable economic growth through data-driven insights and strategic planning.
Dr. Virmani noted that the FHI reinforces cooperative federalism as a cornerstone of India’s governance framework, helping address regional disparities and fostering holistic development.
With the FHI report serving as a benchmark, Odisha sets an example for other states, demonstrating the transformative impact of prudent fiscal management on sustainable growth.
