NITI Aayog released the second annual edition of the Fiscal Health Index (FHI) 2026 for financial year 2023-24, evaluating the fiscal performance of Indian states using audited data primarily from the Comptroller and Auditor General (CAG) of India. The index expanded this year to include 10 North-Eastern and Himalayan states alongside the 18 major states assessed in the first edition.
The FHI 2026 assesses states across five critical pillars: Quality of Expenditure, Revenue Mobilisation, Fiscal Prudence, Debt Index, and Debt Sustainability. Among major states, Odisha ranked first with a composite score of 73.1, followed by Goa (54.7) and Jharkhand (50.5) in the Achievers category. Gujarat, Maharashtra, Chhattisgarh, Telangana, Uttar Pradesh, and Karnataka were classified as Front Runners, while Madhya Pradesh, Haryana, Bihar, Tamil Nadu, and Rajasthan were categorised as Performers.
Rajasthan's position as a Performer state reflects adequate fiscal management with some challenges. However, Rajasthan improved from Performer to Front Runner on the Quality of Expenditure metric, indicating positive progress in directing spending towards productive capital expenditure. States account for nearly one-third of India's general government debt and serve as primary providers of public services and capital expenditure, making this index critical for fiscal policy guidance.
The FHI uses audited figures from CAG reports to ensure data reliability, and aims to nudge states towards stronger fiscal practices, better revenue generation, and sustainable debt management. The index is a key tool under cooperative federalism to benchmark and improve state fiscal governance across India.