In January 2025, the Niti Aayog published the inaugural issue of the Fiscal Health Index Report. Which is the top ranking state as per the latest figures provided for the Financial Year 2023, according to the report ?

The correct answer is Odisha.

Key Points

• The Fiscal Health Index Report published by Niti Aayog evaluates the fiscal performance of states based on indicators like revenue generation, expenditure management, and debt sustainability.
• Odisha ranked as the top-performing state in the Fiscal Health Index Report for FY 2023 due to its efficient fiscal management and strong revenue generation.
• Odisha has consistently demonstrated a lower debt-to-GSDP ratio compared to the national average, highlighting its prudent fiscal planning.
• Key reforms in tax administration and expenditure optimization contributed to Odisha's strong fiscal health, as recognized by Niti Aayog.
• The state's focus on long-term sustainability, including increased investment in infrastructure and social welfare programs, played a pivotal role in achieving the top rank.

Additional Information

• Fiscal Health Index
  • The Fiscal Health Index is an assessment tool developed by Niti Aayog to evaluate state governments' fiscal performance.
  • It considers parameters such as revenue generation, fiscal deficit, debt sustainability, and expenditure patterns.
  • The index helps identify states adopting prudent fiscal measures and encourages others to improve their fiscal management practices.
• Debt-to-GSDP Ratio
  • The debt-to-GSDP ratio is a metric that measures a state's total debt as a percentage of its Gross State Domestic Product.
  • It reflects the fiscal stability and sustainability of the state government in managing its borrowings.
• Revenue Generation
  • Revenue generation refers to the state's ability to collect taxes and other income to fund its expenditures.
  • Higher revenue collection indicates efficient tax administration and economic growth.
• Expenditure Management
  • Expenditure management involves the allocation and utilization of resources in a way that promotes economic growth and social welfare.
  • States with disciplined expenditure management often maintain better fiscal health.