India Fiscal Health Index 2025
Fiscal Health Index 2025
Mapping India's State-Level Economic Resilience
Introduction
The Fiscal Health Index (FHI) initiative aims to provide an understanding of the fiscal health of states in India. The analysis covers eighteen major states that significantly contribute to India’s GDP, demography, public expenditure, revenues, and overall fiscal stability.
Objectives of the Fiscal Health Index
- Provide a comparative analysis of fiscal health across Indian states.
- Identify strengths and concerns in states' fiscal management practices.
- Promote transparency and accountability in fiscal management.
- Assist policymakers in enhancing fiscal sustainability and resilience.
Key Indicators Evaluated
1. Revenue Generation and Mobilization
Assessment of states' own revenue receipts, tax buoyancy, and non-tax revenue generation.
2. Expenditure Management and Prioritization
Evaluation of efficiency in expenditure allocation and adherence to fiscal discipline.
3. Debt Management
Analysis of states’ debt-to-GSDP ratios and overall sustainability of debt portfolios.
4. Fiscal Deficit Management
Measurement of states’ fiscal deficit as a percentage of Gross State Domestic Product (GSDP).
5. Overall Fiscal Sustainability
Composite analysis of revenue, expenditure, deficit, and debt indicators.
Key Findings
Odisha leads the fiscal health index with a score of 67.8, excelling in Debt Index and Debt Sustainability. Chhattisgarh and Goa follow closely, showcasing strong fiscal management.
States like Punjab, Andhra Pradesh, West Bengal, and Kerala face significant fiscal challenges, including high fiscal deficits and poor debt sustainability.
Conclusion
The Fiscal Health Index 2025 serves as a valuable tool for assessing the fiscal performance of Indian states. Continuous monitoring and prudent fiscal management are essential for enhancing financial health.
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