NEW DELHI: Odisha, Chhattisgarh, Goa, Jharkhand and Gujarat have emerged as the top performing states in the fiscal health index, compiled by govt think tank Niti Aayog.
Punjab, Andhra Pradesh, West Bengal, Kerala and Haryana figure at the bottom of the table. The performance of the states have been put under four categories – achievers, front runners, performers and aspirational. Odisha, Chhattisgarh, Goa, Jharkhand and Gujarat are achievers, with higher capital outlay, effective mobilisation of non-tax revenue, creation of revenue surpluses, low interest payments. States under the aspirational category include Kerala, West Bengal, Andhra Pradesh and Punjab. The states under the aspirational category are struggling to meet the fiscal and revenue deficit targets, have low revenue mobilisation and are faced with growing debt burden, and debt sustainability is a concern.
The states’ performance varies across the five sub-categories. For instance, Uttar Pradesh and Bihar have a good score under quality of expenditure but they rank lower with regard to revenue mobilisation, Karnataka has performed well across most indices but it ranks among the three bottom states in terms of debt sustainability. Odisha and Chhattisgarh have performed well under revenue mobilisation category with their own non-tax revenue growing significantly due to high revenue collection from mining. But on debt sustainability, Chhattisgarh ranks lower compared to other states.
The Fiscal Health Index (FHI) is aimed at evolving an understanding of the fiscal health of states in the country. The analysis covers eighteen major states that drive the country’s economy in terms of their contribution to GDP, demography, total public expenditure, revenues, and overall fiscal stability.
“As states are responsible for approximately two-thirds of public spending and one third of total revenue, their fiscal performance is important for the country’s overall economic stability,” according to the report. It further adds that the objective is to evaluate fiscal health of the states through key fiscal parameters, identify fiscal strengths and weaknesses.
