Maha drops to 6th spot in Fiscal Health Index in ’23 | Mumbai News

Mumbai: Although Maharashtra has reported strong revenue mobilisation over the past decade, according to NITI Aayog’s Fiscal Health Index 2025 report, the state’s ranking has declined from the fourth position in 2022 to sixth in 2023. Odisha, Chhattisgarh, Goa, Jharkhand and Gujarat are the top five high-performing states. Maharashtra is followed by UP, Telangana, MP and Karnataka, reports Prafulla Marpakwar.
The FHI evaluates states on expenditure quality, revenue mobilisation, fiscal prudence, debt index, and debt sustainability. Significantly, state’s total expenditure as a proportion of Gross State Domestic Product in 2022-23 stood at 13.4%, which is below the major states’ average of 15.8%.
The NITI Aayog’s Fiscal Heath Index, which aims to help policymakers identify areas for reform and promote best practices across states, shows that Goa, Telangana, Odisha and Maharashtra have reported strong revenue mobilisation during the period under study. Effective tax collection systems, revenue mobilisation efforts, and a balanced approach to expenditure have allowed these states to manage their fiscal positions better. While Goa leads in revenue mobilisation, it is followed by Telangana, Odisha, Maharashtra and Chhattisgarh.
NITI Aayog found while the expenditure on education as a proportion of total expenditure rose from 16.9% in 2018-19 to 17.2% in 2022-23, while there was a marginal increase in the case of other states, in Maharashtra, it dropped from 14.8% to 14.0% between 2022-23. Further, despite a marginal rise from 2018-19, the state’s health expenditure as a proportion of the total expenditure remains at 4.3%, lower than major states’ average of 5.7%.
Significantly, it was found the state’s social and economic sector spending as a proportion of the total expenditure is below major states, indicating underinvestment in both sectors.
On revenue mobilisation, the report says revenue receipts grew at 21.7%, and their percentage over GSDP improved from 10.7% in 2022 to 11.5% in 2023. The state’s own tax revenue increased 25.6% due to SGST collection while the non-tax revenue decreased 13% from 2021-22 due to decreased revenue collection under the fees received from land under urban development.
On fiscal prudence, the report says the revenue deficit as a percentage of GSDP stood at 0.1% against the target of revenue surplus whereas the fiscal deficit as a percentage of GSDP stood at 1.9% against the limit of 3.5%. The fiscal deficit increased over the previous year due to a rise in capital expenditure. On debt sustainability, the report says the debt burden grew at an average rate of 9.9% annually between 2018-19 and 2022-23. Majority of the borrowing was used to repay older borrowing in the current period.