Odisha at No. 1 in Fiscal Health Index 2026
According to NITI Aayog’s Fiscal Health Index 2026, Odisha not only retained the top position among major states but also widened the gap over most of its peers. The state’s composite score of 73.1 reflected strong performance across several indicators that are central to long-term public finance stability. Its sub-scores were equally notable: 71.2 in Quality of Expenditure, 80.3 in Revenue Mobilisation, 58.7 in Fiscal Prudence, 95.8 in Debt Index and 59.5 in Debt Sustainability. In plain terms, the report found that Odisha was not just collecting revenue well, but also spending with greater efficiency while keeping its debt burden under better control than most large states.
The top 10 states in the 2026 ranking of major states were Odisha, Goa, Jharkhand, Gujarat, Maharashtra, Chhattisgarh, Telangana, Uttar Pradesh, Karnataka and Madhya Pradesh. NITI Aayog grouped Odisha, Goa and Jharkhand in the “Achiever” category, signalling that these states performed better than the rest on the overall fiscal health framework. The ranking for north-eastern and Himalayan states was presented separately, with Arunachal Pradesh leading that category, which is important because those states have a different fiscal and geographic profile.
For Odisha, the headline number matters because fiscal health rankings are closely tied to how well a state can sustain welfare spending, infrastructure expansion and public services without slipping into rising debt stress. A higher score does not simply indicate larger revenue collections; it also points to the state’s ability to spend productively, remain within deficit limits and preserve room for future investment.
What the Fiscal Health Index 2026 Measures
The Fiscal Health Index 2026 is NITI Aayog’s second edition of the state fiscal assessment framework. It evaluates major states using five broad pillars: Quality of Expenditure, Revenue Mobilisation, Fiscal Prudence, Debt Index and Debt Sustainability. The report is based on FY 2023-24 data and draws from financial information compiled by the Comptroller and Auditor General of India. That makes the index especially relevant because it is not built around political claims or budget announcements alone, but around audited public finance data.
Each pillar captures a different part of a state’s fiscal condition. Quality of Expenditure looks at how effectively a state allocates money between developmental priorities and routine obligations. Revenue Mobilisation examines the state’s own ability to generate revenue through tax and non-tax sources. Fiscal Prudence studies deficit control, especially whether the state remains within prescribed norms such as those linked to the Fiscal Responsibility and Budget Management framework. Debt Index focuses on debt stock and the pressure created by interest payments, while Debt Sustainability assesses whether economic growth is outpacing the burden of debt servicing over time.
This is why Odisha’s top rank stands out. The state did not lead on a single isolated number. It scored strongly across the full chain of public finance management, from revenue generation to expenditure quality to debt control. That broader balance is one reason the report described Odisha as the strongest performer among the major states.
Why Odisha is ranked first
The biggest reason behind Odisha’s No. 1 position was the combination of strong revenue mobilisation and a very strong debt profile. Its Revenue Mobilisation score of 80.3 was among the highest in the country, while its Debt Index score of 95.8 was by far the strongest among major states. NITI Aayog said Odisha’s overall fiscal robustness came from prudent deficit control, high-quality expenditure and strong revenue performance, supported by low default risk and effective debt management.
Revenue trends help explain this outcome. Odisha’s own revenue buoyancy with respect to GSDP improved from 0.68 in 2019-20 to 1.65 in 2023-24, according to the state profile in the report. The increase was driven mainly by higher collections from SGST, state excise and sales taxes. Even more striking was the growth in non-tax revenue. The report said Odisha’s non-tax revenue rose by 261.9%, from ₹14,647 crore in 2019-20 to ₹53,011 crore in 2023-24. It also recorded a 24.1% increase over the previous year, with higher receipts from mining, coal, lignite and dividends from state public sector undertakings.
That matters because states that generate stronger own revenues typically have more flexibility in budgeting and less dependence on uncertain fiscal space. Odisha’s revenue strength was not built on one-time windfalls alone; the report connected it to broader gains in tax collections as well as resource-linked non-tax earnings. In a state economy where mining remains a major contributor, that non-tax channel has clearly played a significant role in lifting fiscal capacity.
Expenditure Quality Also Lifted Odisha’s Score
Odisha’s performance was not driven by revenue alone. The report also pointed to meaningful gains in the quality of the state’s expenditure. Its score of 71.2 under this pillar placed it among the best-performing states. In 2023-24, Odisha’s revenue expenditure increased by 13.6%, with higher spending on social services and economic services, even as outlays on general services declined. At the same time, capital expenditure rose by 29.8% over the previous year, reflecting stronger spending on infrastructure and sectoral development.
Within this spending pattern, the report highlighted two notable social-sector details. Odisha spent 13.2% of its total expenditure on education in 2023-24, slightly below the major states’ average of 14.4%. Health spending, however, stood at 8.2% of total expenditure, well above the major states’ average of 5.7%. That suggests the state’s expenditure priorities were tilted more strongly toward health than the average state in the same comparison group.
The report also said committed expenditure on interest payments, salaries and pensions accounted for 36% of revenue expenditure in 2023-24. While committed spending always reduces the room available for fresh development spending, Odisha’s burden was still kept at a moderate level relative to its overall fiscal position. In effect, the state appears to have protected enough fiscal space to keep investing in development-oriented sectors while also maintaining control over routine obligations.
Deficit Control and FRBM Compliance Strengthened Odisha’s Standing
Another major reason Odisha ranked first was its performance on fiscal prudence. The state profile in the report said that over the five years from 2019-20 to 2023-24, Odisha consistently achieved fiscal targets set under the Finance Commission framework and the FRBM Act. In 2023-24, its fiscal deficit remained at 1.73% of GSDP, comfortably within the FRBM target. The report also noted that the fiscal deficit declined by 3.1% in that year, helped mainly by an increase in revenue surplus.
The revenue side again played an important role here. Odisha’s revenue surplus increased by 58.11% over 2022-23, pointing to stronger revenue growth and a healthier current account position in the state budget. For a state to preserve revenue surplus while continuing to raise both revenue and capital expenditure is significant because it indicates a degree of fiscal flexibility that many debt-stressed states struggle to maintain.
In practical terms, a lower fiscal deficit means the state is not leaning excessively on borrowing to bridge routine budget gaps. That reduces future interest burdens and leaves more room to absorb shocks, whether they come from weaker tax growth, commodity cycles or unplanned expenditure demands.
Debt Profile Was One of Odisha’s Biggest Strengths
Perhaps the most striking part of Odisha’s Fiscal Health Index 2026 profile was its performance on debt. The report said the state’s debt-to-GSDP ratio fell from 23.46% in 2019-20 to 14.39% in 2023-24. That decline is important because it shows that the state economy grew faster than debt accumulation over the same period. At the same time, the burden of servicing that debt also eased. Interest payments as a share of revenue receipts dropped from 5.97% in 2019-20 to 2.88% in 2023-24.
NITI Aayog also pointed to a mostly positive Domar gap for Odisha during 2019-24. In public finance terms, that means the growth rate of the economy was generally outpacing the effective interest burden on government debt. When that happens consistently, debt sustainability improves because the state is better positioned to carry and service its liabilities without allowing the debt stock to become destabilising over time.
This is the part of Odisha’s fiscal story that makes the top ranking especially notable. A state can sometimes rank high because of a temporary jump in revenues, but sustaining a top position becomes far more credible when the debt profile also improves. In Odisha’s case, the report connected the state’s ranking not just to stronger receipts, but also to a longer-term pattern of healthier debt management and lower interest pressure.
How Odisha Compares With the Previous Edition
The 2026 ranking also matters because it follows Odisha’s strong showing in the previous edition of the index. In the Fiscal Health Index 2025, Odisha had already topped the list of major states with a score of 67.8. The latest report shows the state again at No. 1, this time with a higher score of 73.1. That continuity matters because it suggests Odisha’s performance was not a one-year spike. Instead, the state has remained near the top of India’s fiscal rankings across multiple assessment rounds.
NITI Aayog’s longer trends table in the 2026 report also showed Odisha as a consistent performer across time periods. The report described the state as strengthening its position across all periods considered in the decade-long comparison. That places Odisha in a relatively rare category among large states: one that combines strong present-year performance with visible continuity over time.
What Odisha’s No. 1 Ranking Means
Odisha’s top position in the Fiscal Health Index 2026 does not mean every challenge has disappeared. The same report noted that education spending as a share of total expenditure was below the average for major states, which leaves room for future balancing in social-sector priorities. But the larger picture remains clear. Odisha entered the 2026 ranking with a stronger revenue base, a healthier deficit position, lower debt stress and better expenditure quality than most of its peers.
For policymakers, investors, researchers and readers tracking India’s state finances, that combination is meaningful. Strong fiscal health improves a government’s ability to plan capital spending, maintain welfare commitments and absorb pressure during downturns. It also reduces the risk that rising debt servicing will crowd out development spending later. That is why fiscal health rankings draw interest beyond finance departments: they speak directly to the state’s room for long-term governance and public investment.
