State among bottom 5 in NITI Aayog’s fiscal health index

Haryana has been ranked 14th in NITI Aayog’s Fiscal Health Index (FHI) 2025 report, placing it among the bottom five of 18 major states. The ranking is based on five parameters: quality of expenditure, revenue mobilisation, fiscal prudence, debt index, and debt sustainability.

The FHI covers 18 key states that significantly contribute to India’s GDP, demography, public expenditure, revenues, and fiscal stability. The report, released on Friday, examines fiscal performance from 2014-15 to 2022-23.

For 2022-23, Haryana received an overall score of 27.4, with individual scores of 24.8 in quality of expenditure, 47.8 in resource mobilisation, 26.1 in fiscal prudence, 24.1 in debt index, and 14.3 in debt sustainability. Even when considering average scores for 2014-19 and 2014-2022, the state ranked 14th.

The report highlights Haryana’s weak debt profile. The debt-to-GSDP ratio rose from 26% in 2018-19 to 33% in 2020-21, before falling slightly to 31.7% in 2021-22 and stabilising at 31% in 2022-23. Interest payments grew by 9.4% in 2022-23 compared to the previous year, with the interest payment-to-revenue receipt ratio at 23%.

"The outstanding liability-to-GSDP ratio exceeded targets from 2018-19 to 2022-23," the report notes. "Short- to medium-term fiscal sustainability is at risk unless the state takes measures to rationalise expenditures, broaden the revenue base, and invest in revenue-generating assets."

Haryana ranks 15th on the Debt Index parameter, scoring 24.1, ahead of only Kerala (23.1), West Bengal (18.3), and Punjab (0).

In 2022-23, Haryana’s revenue deficit was 1.7% of GSDP, failing to meet the 15th Finance Commission’s recommendations. While the revenue deficit has decreased in recent years, it remains higher than in 2018-19. Fiscal deficits from 2017-18 to 2021-22 were largely financed through public debt, including market borrowings and loans from the Central government.

On the quality of expenditure parameter, Haryana ranked 16th with a score of 24.8, ahead of only Punjab (4.7) and Kerala (4.2). The report noted a decline in capital expenditure growth compared to GSDP since 2018-19. Capital expenditure constituted just 1.4% of GSDP in 2022-23, lower than budget estimates.

Capital expenditure as a share of total expenditure fell from 16.4% in 2018-19 to 9.7% in 2022-23. Spending on social services declined by 31.3% in 2022-23, while spending on economic services increased by 46.7%. Committed expenditure accounted for 55% of total revenue expenditure in 2022-23, compared to 54% in 2018-19.

The report also highlighted that while spending on education and health was lower than other major states in 2018-19, it surpassed them in 2022-23.

“Haryana may increase capital expenditure on social services while enhancing tax collection efficiency and establishing a clear fiscal management framework, especially with regard to debt sustainability," recommended the report.