NITI Aayog released the second edition of its annual Fiscal Health Index (FHI) on March 11, 2026, assessing the fiscal health of 28 Indian states for the financial year 2023-24. The index uses Comptroller and Auditor General (CAG) data and evaluates states across five pillars: fiscal prudence (debt and deficit management), revenue mobilisation (own-tax and non-tax revenue), quality of expenditure (capital vs. revenue spending), debt index, and debt sustainability.
Among 18 major states, Odisha ranked first, retaining its top position from the inaugural edition, thanks to strong fiscal prudence and low debt burden. Goa and Jharkhand secured the next two top Achiever positions respectively. In the Special Category States comprising 10 North-Eastern and Himalayan states, Arunachal Pradesh topped the rankings, followed by Uttarakhand and Tripura.
Rajasthan's performance in the index was notable in the expenditure quality pillar, where the state improved its capital expenditure-to-revenue expenditure ratio, reflecting greater investment in productive assets. However, Rajasthan continued to face challenges in revenue mobilisation and debt sustainability, areas NITI Aayog has flagged for improvement.
The FHI is designed as a diagnostic and benchmarking tool to help state governments identify fiscal gaps and adopt best practices. Unlike credit rating assessments, the FHI is non-punitive and aims to foster cooperative federalism by encouraging states to improve fiscal discipline over time. NITI Aayog plans to release the index annually, using updated CAG audited accounts as the primary data source.