Arunachal tops Fiscal Health Index 2026; Assam ranked fifth among NE states

Guwahati, March 30: Arunachal Pradesh leads ten Northeastern and Himalayan states in fiscal performance, followed by Uttarakhand and Tripura, while Assam has been ranked fifth, which is below Tripura and Meghalaya, according to the Fiscal Health Index (FHI) 2026.

Arunachal Pradesh ranks highest (59.5) with exceptionally high scores in Quality of Expenditure and strong performance in Fiscal Prudence and Debt Index.

Uttarakhand (52.5), on the other hand, is supported primarily by very high Revenue Mobilisation and strong scores in Debt Index and Debt Sustainability.

Meghalaya (41.5) and Assam (39.1) occupy middle positions with mixed performance.

Meghalaya benefits from high Quality of Expenditure and a favourable Debt Index, while Assam performs well in Revenue Mobilisation and Debt Index, but is weighed down by weak Fiscal Prudence, according to the FHI 2026 released by Niti Aayog.

The report assesses States on five parameters - Quality of Expenditure, Revenue Mobilisation, Fiscal Prudence, Debt Index, and Debt Sustainability, by analysing fiscal trends from FY 2014–15 to FY 2023-24.

The 10 Northeastern and Himalayan states were analysed separately. In the year 2015-16, Assam was ranked first in this category.

Mizoram, Nagaland, and Sikkim also demonstrate a mixed performance. Mizoram performs well on Fiscal Prudence and Debt Index but struggles with Debt Sustainability.

Sikkim has balanced scores. Nagaland’s performance lags under Revenue Mobilisation and Quality of Expenditure, despite a reasonable debt position.

Himachal Pradesh and Manipur rank at the bottom with weak performance across Fiscal Prudence and Revenue Mobilisation, respectively.

According to the assessment, Assam’s fiscal profile in 2023–24 highlights continued developmental focus supported by steady revenue growth and partial fiscal consolidation.

Developmental expenditure rose by nearly 39 per cent between 2020–21 and 2023–24, reflecting sustained investment in growth and welfare schemes.

However, the predominance of revenue spending and a high share of committed expenditure - over 62 per cent of revenue receipts - have constrained flexibility for fresh initiatives.

Developmental spending accounted for nearly 64 per cent of total expenditure in 2023–24, though down from over 69 per cent in 2020–21.

Assam’s own revenue increased from Rs 20,033 crore in 2020–21 to Rs 34,081 crore in 2023–24, reflecting a compound annual growth rate (CAGR) of roughly 14 per cent.

While this indicates improving revenue mobilisation, the State continues to rely heavily on Central transfers, which account for 38.4 per cent of revenue receipts in 2023–24.

Assam’s Gross Fiscal Deficit (GFD) as a share of GSDP rose sharply to 5.9 per cent in 2022–23 from 3.6 per cent in 2020–21, with a partial decline to 3.7 per cent in 2023–24, indicating partial fiscal consolidation.

The State’s outstanding liabilities and interest payments grew by 67 per cent and 57 per cent respectively between 2020–21 and 2023–24, indicating sustained borrowing which has increased the State’s debt servicing obligations and constrained fiscal flexibility.

Interest payments have continued to rise, with the ratio of interest payments to revenue receipts, which had declined from 8 per cent in 2020–21 to 7.7 per cent in 2022–23, surging back to around 8–9 per cent in 2023–24.