{"id":2245,"date":"2026-04-06T09:31:24","date_gmt":"2026-04-06T09:31:24","guid":{"rendered":"https:\/\/spmiasacademy.com\/currentaffairs\/?p=2245"},"modified":"2026-04-06T09:32:22","modified_gmt":"2026-04-06T09:32:22","slug":"niti-aayogs-fiscal-health-index-2026","status":"publish","type":"post","link":"https:\/\/spmiasacademy.com\/currentaffairs\/niti-aayogs-fiscal-health-index-2026\/","title":{"rendered":"NITI Aayog\u2019s Fiscal Health Index 2026: Rankings & Key Facts"},"content":{"rendered":"\n

The Fiscal Health Index (FHI) 2026, released by NITI Aayog, evaluates the financial health of Indian states across five pillars. Among the 18 major states, Odisha ranks first. Among the 10 North-Eastern and Himalayan states, Arunachal Pradesh tops the list with a score of 59.5, followed by Uttarakhand and Tripura. Assam ranks fifth in this category. This annual index is a high-priority topic for UPSC, APSC, and all State PCS examinations.<\/p>\n\n\n\n

Students preparing for civil services can explore coaching classes for upsc in assam<\/a><\/strong> for structured guidance and expert mentorship.<\/p>\n\n\n\n

What Is the Fiscal Health Index 2026?<\/strong><\/h2>\n\n\n\n

NITI Aayog publishes the Fiscal Health Index (FHI) to give a clear picture of how well Indian states manage their fiscal health. The FHI 2026 is the second edition of this report, and it covers the financial year 2023-24. The report analyses fiscal trends from FY 2014-15 to FY 2023-24, giving a ten-year view of each state’s financial journey.<\/p>\n\n\n\n

This edition is especially important because NITI Aayog has now included the 10 North-Eastern and Himalayan states along with the 18 major states. These two groups are assessed separately, because the Northeastern and Himalayan states face unique challenges such as difficult terrain, sparse population, high delivery costs, and heavy dependence on Central government transfers.<\/p>\n\n\n\n

Moreover, the Fiscal Health Index draws its data from the Comptroller and Auditor General (CAG). This makes the index one of the most credible and transparent fiscal assessments available.<\/p>\n\n\n\n

Regularly following currentaffairs<\/a><\/strong> helps aspirants track reports like FHI for UPSC and APSC preparation.<\/p>\n\n\n\n

The Five Pillars of the Fiscal Health Index<\/strong><\/h3>\n\n\n\n

The FHI assesses every state on five clearly defined parameters. Understanding these pillars helps you answer both factual and analytical questions in the UPSC Prelims and Mains, as well as the APSC and other State PCS exams.<\/p>\n\n\n\n

No.<\/strong><\/th>Pillar<\/strong><\/th>What It Measures<\/strong><\/th><\/tr><\/thead>

1<\/td>
Quality of Expenditure<\/td>		How much a state spends on development versus non-productive items like salaries and pensions.<\/td><\/tr>


2<\/td>
Revenue Mobilisation<\/td>		How effectively a state generates its own revenue through taxes and non-tax sources.<\/td><\/tr>

3<\/td>
Fiscal Prudence<\/td>		Whether a state keeps its fiscal deficit within manageable limits and follows FRBM norms.<\/td><\/tr>

4<\/td>
Debt Index<\/td>		The level and composition of outstanding liabilities relative to the state’s economy.<\/td><\/tr>

5<\/td>
Debt Sustainability<\/td>		Whether the state can manage its debt repayment obligations without compromising growth.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

FHI 2026 Rankings: 18 Major States<\/strong><\/h2>\n\n\n\n

Odisha continues to dominate among the 18 major states. It controls its deficit tightly, maintains stable revenues, and ranks as the top Achiever for the second time in a row. Meanwhile, states like Punjab, Kerala, and West Bengal remain at the bottom because they carry high debt, persistent deficits, and modest revenue growth.<\/p>\n\n\n\n

\"NITI<\/figure>\n\n\n\n
\"NITI<\/figure>\n\n\n\n

Notable Movers in Major States<\/strong><\/h3>\n\n\n\n

Several states changed their positions significantly this year. Bihar improved from Aspirational to Performer – a positive signal of better deficit management. On the other hand, Karnataka <\/strong>and Telangana <\/strong>slipped from Front Runner to Performer, while Kerala <\/strong>and Tamil Nadu<\/strong> moved further down to the Aspirational group, highlighting growing fiscal pressures in these states.<\/p>\n\n\n\n

Furthermore, Haryana<\/strong> recorded a notable improvement of three ranks – one of the biggest jumps this year. This kind of data point often appears in UPSC Prelims questions, so keep it handy.<\/p>\n\n\n\n

FHI 2026 Rankings: North-Eastern and Himalayan States<\/strong><\/h2>\n\n\n\n

Among the 10 NE and Himalayan states, the rankings reveal wide variation. These states face structural challenges that major states do not. They depend heavily on Central transfers, have lower own-revenue capacity, and operate with higher service delivery costs.<\/p>\n\n\n\n

\"NITI<\/figure>\n\n\n\n
\"NITI<\/figure>\n\n\n\n

Why Arunachal Pradesh Leads<\/strong><\/h3>\n\n\n\n

Arunachal Pradesh earns the top rank because it scores exceptionally well in Quality of Expenditure. Additionally, it maintains strong performance in both Fiscal Prudence and the Debt Index. The state manages to keep deficits low and sometimes even records surpluses – a rare achievement among NE states. Its capital outlay and developmental spending also exceed two-thirds of total expenditure, further strengthening its score.<\/p>\n\n\n\n

Why Uttarakhand Ranks Second<\/strong><\/h3>\n\n\n\n

Uttarakhand secures second place primarily through very high Revenue Mobilisation. Unlike many other NE and Himalayan states that rely heavily on Central transfers, Uttarakhand generates a comparatively stronger share of its own revenue. This, combined with strong scores in the Debt Index and Debt Sustainability, places it firmly in the Achiever category.<\/p>\n\n\n\n

Assam’s Fiscal Profile: Detailed Analysis<\/strong><\/h2>\n\n\n\n

Assam currently ranks fifth<\/strong> among the Ten NE\/Himalayan states<\/strong>.<\/p>\n\n\n\n

Key Statistical Snapshot: Assam 2023-24<\/strong><\/h3>\n\n\n\n
Indicator<\/strong><\/th>Value<\/strong><\/th><\/tr><\/thead>
FHI Score<\/td>39.1 (Rank 5 among NE\/Himalayan states)<\/td><\/tr>
CAGR of Own Revenue (2020-21 to 2023-24)<\/td>~14%<\/td><\/tr>
Own Revenue (2020-21)<\/td>Rs 20,033 crore<\/td><\/tr>
Own Revenue (2023-24)<\/td>Rs 34,081 crore<\/td><\/tr>
Gross Fiscal Deficit as % of GSDP (2023-24)<\/td>3.7% (2023-24)<\/td><\/tr>
Gross Fiscal Deficit as % of GSDP (peak, 2022-23)<\/td>5.9% (2022-23)<\/td><\/tr>
Developmental Spending as % of Total Expenditure<\/td>~64% (2023-24)<\/td><\/tr>
Dependence on Central Transfers<\/td>38.4% of revenue receipts<\/td><\/tr>
Growth in Outstanding Liabilities (2020-21 to 2023-24)<\/td>~67%<\/td><\/tr>
Growth in Interest Payments (2020-21 to 2023-24)<\/td>~57%<\/td><\/tr>
Interest-to-Revenue Receipts Ratio (2023-24)<\/td>~8-9%<\/td><\/tr>
Committed Expenditure (% of revenue receipts)<\/td>Over 62%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Assam’s Strengths<\/strong><\/h3>\n\n\n\n