In the NITI Aayog Fiscal Health Index for 2026, which assessed state finances for the year 2023-24 on the basis of expenditure quality, revenue mobilisation, fiscal prudence, debt levels and debt sustainability, Punjab finished last among the eighteen major states with a score of only 12.4 out of 100. Odisha, by contrast, led the ranking with a commanding 73.1, followed by Goa at 54.7 and Jharkhand at 50.5. Gujarat, Maharashtra, Chhattisgarh, Telangana, Uttar Pradesh and Karnataka occupied the stronger middle-to-upper ranks, while Haryana, Bihar, Tamil Nadu and Rajasthan sat in the middle of the table. Kerala, West Bengal and Andhra Pradesh joined Punjab in the lowest “Aspirational” group, yet even these states scored markedly higher than Punjab.
The disparity becomes still clearer when debt burdens are examined. Punjab’s outstanding liabilities stand at roughly 46.6 per cent of its Gross State Domestic Product according to recent budget estimates, placing it among the most heavily indebted of the large non-special-category states. Neighbouring Haryana carries a ratio closer to 30 per cent, while fiscal leaders such as Gujarat and Maharashtra keep their debt near 18–19 per cent of GSDP and Odisha records one of the lowest figures at about 16 per cent. Kerala and West Bengal also face elevated burdens in the mid-to-high thirties, yet Punjab remains an outlier among states with sizeable economic bases. The high debt stock translates into heavy interest payments that absorb a large share of revenue receipts and leave correspondingly less fiscal space for productive investment.
Fiscal and revenue deficits reinforce the same pattern. Punjab has recorded fiscal deficits in the range of 4.1 to 4.7 per cent of GSDP in recent years, well above the conventional 3 per cent FRBM benchmark that many states still find difficult to observe. Its revenue deficit has remained stubbornly elevated as well, indicating that a substantial portion of fresh borrowing is used to meet day-to-day expenditure rather than to build assets. Odisha, by comparison, often posts low fiscal deficits and frequent revenue surpluses. Gujarat and Maharashtra generally maintain tighter overall balances, and even Haryana performs better than Punjab on these indicators.
Kerala, West Bengal and Andhra Pradesh share some of the same deficit pressures that place them near the bottom of the Fiscal Health Index, yet Punjab’s combination of the lowest composite score, the highest debt ratio among major states and persistently large revenue deficits sets it apart from both the leaders and most of its peers.Taken together, the comparison shows that states such as Odisha, Gujarat and Maharashtra have achieved stronger own-revenue generation, tighter control over spending, lower debt burdens and higher-quality capital outlays. Punjab’s difficulties—rooted in heavy subsidy commitments, rigid salary, pension and interest obligations, and limited revenue buoyancy—leave it in a distinctly weaker position. While fiscal pressures are common across many Indian states, the scale and persistence of Punjab’s imbalances make its situation more acute.
Referances:@Infostrixx,forbesindia.com,@IndianIndex,spmiasacademy.com
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