Odisha tops NITI fiscal health index, Chhattisgarh next best
(Source – The Hindu, International Edition – Page No. – 4)
| Topic: GS2 – Governance, GS3 – Indian Economy |
| Context |
|
Top-Performing States: Achievers
- Odisha, Chhattisgarh, Goa, and Jharkhand were ranked as “achievers” for their robust fiscal health.
- Odisha led the rankings with a Fiscal Health Index (FHI) score of 67.8, showcasing exceptional performance in debt management and fiscal discipline.
- These States exhibited:
- Capital outlay of up to 4% of Gross State Domestic Product (GSDP).
- Effective mobilisation of non-tax revenues.
- Revenue surplus and low interest payments (up to 7% of revenue receipts).
Front-Runners and Performers
- Front-runners: Maharashtra, Uttar Pradesh, Telangana, Madhya Pradesh, and Karnataka.
- These States reported high developmental expenditure (up to 73% of total spending).
- Consistent growth in own tax revenue and balanced fiscal management were noted.
- Improved debt sustainability was observed, with a debt-to-GSDP ratio of 24%.
- Performers: Tamil Nadu, Bihar, Rajasthan, and Haryana, classified for their moderate fiscal performance.
Aspirational States: Struggling with Fiscal Challenges
- Kerala, West Bengal, Andhra Pradesh, and Punjab were listed as “aspirational” due to significant fiscal challenges.
- Common issues included:
- Low revenue mobilisation.
- Rising debt burdens and poor debt sustainability.
- Struggles to meet fiscal deficit and revenue deficit targets.
Odisha’s Exceptional Fiscal Strengths
- Odisha ranked highest in debt index (99.0) and debt sustainability (64.0).
- The State maintained low fiscal deficits and demonstrated strong debt management.
- Odisha’s capital outlay to GSDP ratio remained above average.
Long-Term Trends (2014-15 to 2021-22)
- Odisha, Goa, Karnataka, Maharashtra, and Chhattisgarh achieved the highest average FHI scores during this period.
- Data for the FHI was sourced from the Comptroller and Auditor General (CAG).
| PYQ: What are the reasons for introduction of Fiscal responsibility and Budget Management (FRBM) act, 2003? Discuss critically its salient features and their effectiveness. (200 words/10m) (UPSC CSE (M) GS-3 2013) |
| Practice Question: Discuss the importance of fiscal health in ensuring sustainable development at the state level. Highlight the challenges faced by Indian States in achieving fiscal stability. (250 Words /15 marks) |
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