Fiscal Health Report: Maharashtra Leads, Followed By Chhattisgarh; Bengal, Punjab And Kerala Perform Worst

Chhattisgarh secured the second position in the report, even though, it is reportedly one of the poorest states in the country.

The report noted that Punjab, Bengal, Bihar, Rajasthan, and Kerala remain most vulnerable to debt sustainability risks, because of their weak fiscal and debt metrics even before the pandemic.

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Maharashtra secured the top position as the best state in overall fiscal health in a report conducted by a foreign brokerage firm. The report, penned by Kaushik Das, chief economist at Deutsche Bank India, was conducted to survey the fiscal health of 17 major states.

According to a PTI report, Chhattisgarh secured the second position in the report. Reportedly, it is one of the poorest states in the country. Following it, Telangana stood third, while the last three positions were occupied by Bengal, Punjab, and Kerala. The report is based on the first budget estimates of the fiscal year 2023-24 (FY24).

On the basis of the revised budget estimates of fiscal year 2022-23 (FY23), Maharashtra secured the top position in overall fiscal health. It was followed by Chhattisgarh, Orissa Telangana and Jharkhand. On the other hand, Bengal stood last. Punjab, Bihar, Rajasthan, UP, and Kerala followed it out of the bottom five. Andhra Pradesh saw a drop in it’s ranking from eighth in FY22 to eleventh in FY23, Gujarat meanwhile, dropped from seventh position to the fifth.

Basing the data on the revised actual budget data of fiscal year 2021-22 (FY22), Chhattisgarh came out on top of the list, followed by Maharashtra, Orissa, Jharkhand and Gujarat. On the other hand, Punjab stood at the bottom, followed by Bengal, Kerala, Rajasthan and Bihar, the report noted. 

The fiscal health report is based on four major fiscal criteria, namely, fiscal deficit, own tax revenue, state debt levels, and the interest payment to revenue receipts, all as a percentage of their individual gross state domestic product, reported PTI.

The report noted that on the basis of these criteria, Punjab, Bengal, Bihar, Rajasthan, and Kerala remain most vulnerable to debt sustainability risks, because of their weak fiscal and debt metrics even before the pandemic. The report further stated that the a report from June 2022 by the RBI also warned the states about this. 

The report also noted that the states’ debt/GSDP ratio might be higher than the latest budget estimate, as compared to the double-digit nominal GDP growth seen over the last two fiscal years, the current year is expected to record a nominal GDP growth in the range of 9-9.5 per cent.