Guwahati: Arunachal Pradesh has emerged as the top performer among ten Northeastern and Himalayan states in fiscal management, followed by Uttarakhand and Tripura, according to the Fiscal Health Index (FHI) 2026 released by NITI Aayog. Assam was ranked fifth, placing it behind Tripura and Meghalaya.
Arunachal Pradesh secured the highest score of 59.5, driven by exceptional performance in Quality of Expenditure and strong outcomes in Fiscal Prudence and the Debt Index. Uttarakhand, with a score of 52.5, performed strongly on Revenue Mobilisation, supported by solid results in Debt Index and Debt Sustainability.
Meghalaya (41.5) and Assam (39.1) occupied mid-tier positions, reflecting mixed performance. Meghalaya benefitted from strong Quality of Expenditure and a favourable Debt Index, while Assam showed improvement in Revenue Mobilisation and Debt Index but lagged in Fiscal Prudence.
The FHI evaluates states across five key parameters - Quality of Expenditure, Revenue Mobilisation, Fiscal Prudence, Debt Index, and Debt Sustainability, based on fiscal trends from 2014-15 to 2023-24. The ten Northeastern and Himalayan states were assessed as a separate group.
The report noted that Assam, which ranked first in this category in 2015-16, now reflects a more mixed fiscal profile. Mizoram and Sikkim showed balanced or moderate performance, while Nagaland lagged, particularly in Revenue Mobilisation and Quality of Expenditure despite a relatively stable debt position. Himachal Pradesh and Manipur ranked at the bottom, with weaker indicators across Fiscal Prudence and Revenue Mobilisation.
According to the assessment, Assam's fiscal trajectory in 2023-24 indicates a continued emphasis on development, supported by steady revenue growth and partial fiscal consolidation. Developmental expenditure increased by nearly 39% between 2020-21 and 2023-24, signalling sustained investment in welfare and growth-oriented schemes.
However, the report flagged structural concerns. A high proportion of revenue expenditure and committed spending accounting for over 62% of revenue receipts, has limited the state's fiscal flexibility. Developmental expenditure constituted around 64% of total spending in 2023-24, down from over 69% in 2020-21.
Assam's own revenue rose significantly from Rs 20,033 crore in 2020-21 to Rs 34,081 crore in 2023-24, reflecting an annual growth rate of about 14%. Despite this, dependence on Central transfers remains substantial, accounting for 38.4% of total revenue receipts.
The state's Gross Fiscal Deficit (GFD) as a share of GSDP increased to 5.9% in 2022-23 from 3.6% in 2020-21, before easing to 3.7% in 2023-24, indicating partial correction. At the same time, outstanding liabilities and interest payments rose sharply - by 67% and 57%, respectively, between 2020-21 and 2023-24, pointing to rising debt servicing pressures.
Interest payments as a proportion of revenue receipts, which had declined to 7.7% in 2022-23, increased again to around 8-9% in 2023-24, further constraining fiscal space, the report noted.