Odisha, Goa, Jharkhand top NITI Aayog's Fiscal Health Index for FY24

States now account for nearly a third of India's total government debt, says a NITI Aayog report, urging them to follow fiscal deficit norms

States facing widening revenue deficits must rein in spending and boost local revenues to manage debt levels, according to a NITI Aayog report released some months back. Examining fiscal trends from FY15 to FY24, the government think tank’s Fiscal Health Index (FHI 2026) warns that several state balance sheets are being stretched to their limits. 

  Odisha, Goa, Jharkhand, Gujarat, Maharashtra, Chhattisgarh, Telangana, Uttar Pradesh, Karnataka and Madhya Pradesh emerged as India’s top 10 “fiscally wise” states in the report’s ranking for FY24. Bihar and Telangana showed a mild recovery compared to FY23, while Punjab, West Bengal and Kerala remained at the bottom of the index. 

 

 

  Overall, higher-ranked states display stronger fiscal discipline and resource mobilisation. Lower-ranked states exhibit higher non-developmental expenditure and less sustainable fiscal patterns, the 2026 index said. Among Northeast and Himalayan states, Arunachal Pradesh topped the index, followed by Uttarakhand, Tripura, Meghalaya, Assam and Mizoram.  

The report noted that states now account for nearly a third of India’s total government debt. Because national fiscal sustainability hinges on state-level finances, systematically monitoring state balance sheets is essential for broader macroeconomic stability. It urged states to adhere to fiscal deficit norms under the Fiscal Responsibility and Budget Management Act through disciplined expenditure management, broadening the goods and services tax base, and enhancing their own tax capacity. The FHI assesses states on expenditure quality, revenue mobilisation, fiscal prudence, debt index, and debt sustainability.