Fiscal Health Index (FHI) 2025

Current context: NITI Aayog, in partnership with the Press Information Bureau, has launched the Fiscal Health Index (FHI) 2025, assessing the financial stability of Indian states.

Key Facts

• Released by: NITI Aayog & Press Information Bureau.
• Purpose: Evaluates fiscal health of 18 major states based on expenditure, revenue, and debt management.
• Sub-Indices: Quality of Expenditure, Revenue Mobilisation, Fiscal Prudence, Debt Index, Debt Sustainability.
• Data Source: Comptroller and Auditor General (CAG) (2022-23 financial year).

Findings:

• Top Performer: Odisha, followed by Chhattisgarh, Goa, Jharkhand, Gujarat.
• Debt Concerns: West Bengal & Punjab face high debt-to-GSDP ratios and fiscal stres
• Significance: States account for two-thirds of public spending and one-third of total revenue, impacting economic stability.