RAS question
Which state was at the bottom of the NITI Aayog Fiscal Health Index 2026 among major states?
Correct answer: (B) Punjab.
Punjab was the lowest-ranked major state in NITI Aayog's Fiscal Health Index 2026, placed in the Aspirational category.
Explanation
NITI Aayog's Fiscal Health Index 2026 assessed fiscal performance using five pillars: quality of expenditure, revenue mobilisation, fiscal prudence, debt index and debt sustainability. The report says the 18 major states form the core comparison group, while North-Eastern and Himalayan states are ranked separately. Within the major-state results, Punjab appears in the Aspirational group and is listed at the bottom end of the rankings. Aspirational states perform poorly because they face persistent revenue and fiscal deficits, elevated debt, high committed expenditure, heavy interest payments and relatively low developmental spending. Among the major states, Punjab was at the bottom in the Aspirational category.
Why the other options are wrong
- (A) West Bengal was also in the Aspirational group, but NITI Aayog, Fiscal Health Index 2026 does not place it below Punjab among major states.
- (C) Bihar is not the answer because the report records Bihar as showing a mild recovery and moving from Aspirational to Performer in fiscal-prudence categorisation.
- (D) Rajasthan is not the bottom state; the report places it among the Performer states in the overall major-state grouping, not at the foot of the Aspirational group.
Concept
This tests fiscal federalism and state finances, especially how composite indices compare states across deficits, debt, revenue and expenditure quality. It recurs in RAS because NITI Aayog indices often link current economy questions with governance and public finance.