How does the Fiscal Health Index 2025, launched by NITI Aayog, aim to assess and improve the fiscal health of Indian states?

🧾 Fiscal Health Index (FHI) 2025 – NITI Aayog

🔍 Purpose:

The Fiscal Health Index 2025, launched by NITI Aayog, is designed to assess and improve the fiscal strength of Indian states. It helps in comparing how well each state manages its revenues, expenditures, and debt.

🎯 Objectives:

• ✅ Standardized Comparison across states
• ✅ Identify strengths and weaknesses in fiscal management
• ✅ Promote transparency and efficiency
• ✅ Guide better fiscal policy making

📊 5 Major Components of the Index:

1. Quality of Expenditure
   → Focuses on how much states spend on development vs total spending
2. Revenue Mobilization
   → Measures how efficiently states generate revenue
3. Fiscal Prudence
   → Evaluates fiscal and primary deficits
4. Debt Index
   → Examines debt relative to Gross State Domestic Product (GSDP)
5. Debt Sustainability
   → Assesses long-term ability to manage and repay debts

🏆 Top Ranked States in FHI 2025:

These states performed best across the five fiscal pillars.