Odisha Tops NITI Aayog's Fiscal Health Index; Punjab, AP, Kerala Lag
Punjab scored 0 in the debt index of NITI Aayog's Fiscal Health Index, reflecting stagnant fiscal growth and rising borrowing costs amid widening revenue deficits.
Odisha, Chhattisgarh, and Goa were among the top performers according to the NITI Aayog's Fiscal Health Index of Indian States, a fresh repository of rankings of states according to their fiscal metrics.
States have been judged on the quality of expenditure, revenue mobilisation, debt sustainability, and fiscal prudence, as well as their debt index.
With a cumulative score of 67.8, Odisha topped the ranking among 18 major states, followed by Chhattisgarh and Goa with scores of 55.2 and 53.6, respectively.
"Improvements are seen in states like Jharkhand, which has strengthened fiscal prudence and debt sustainability, while Karnataka faces a decline due to weaker performance in expenditure quality and debt management," the body said.
However, states like Kerala, West Bengal, Andhra Pradesh, and Punjab are struggling to meet their fiscal revenue deficit targets. "They have low revenue mobilisation, a growing debt burden, and debt sustainability is a concern," the report said.
According to BVR Subrahmanyam, CEO of the NITI Aayog, this rankings system is a part of pushing states to glide towards better fiscal paths. "The index is a diagnostic on which state is going where. In 15 days, NITI Aayog will launch a joint portal with NCAER to track state finances," he added.
Cause For Concern?
"Climate change will impact certain states' expenditure and revenue. Odisha and Jharkhand are benefitting from coal royalties currently, but this will change in the future. Fiscal pressures in the future on states are going to rise," said Suman Bery, Vice Chairman, NITI Aayog.
The report, which takes into account fiscal data till FY23 and doesn't consider Himalayan and North-Eastern states since they are special, also adds that the fiscal health of certain states has stagnated in the last 10 years and is not improving.
For instance, Punjab has scored 0 in the debt index part of the ranking, given the fact that the growth rate of its gross state domestic product and the interest rates it borrows at are plateauing.
"States are falling behind on quality of expenditure. The fiscal health of major Indian states is not improving," said Pravakar Sahoo. Senior Lead, NITI Aayog, at the report launch.
