"Fiscal Health of Maharashtra: An Analysis of NITI Aayog's Fiscal Health Index 2025 and 2026"

Abstract Fiscal sustainability is an important determinant of a state's capacity to finance economic development, to provide public services, and to manage emerging economic and social challenges. This paper examines Maharashtra’s fiscal health using NITI Aayog's Fiscal Health Index (FHI) 2025 and 2026. The 2025 edition assesses the fiscal performance of states for financial year (FY) 2022–23, while the 2026 FHI report evaluates financial year (FY) 2023–24. The analysis focuses on five dimensions of fiscal performance: Quality of Expenditure, Revenue Mobilisation, Fiscal Prudence, Debt Index, and Debt Sustainability. Maharashtra ranked sixth among the 18 major states with an FHI score of 50.3 in the 2025 FHI assessment. In the 2026 FHI report, Maharashtra's score declined to 45.0, although its rank improved to fifth. The analysis finds that Maharashtra's key fiscal strengths lie in revenue mobilisation and debt management, while fiscal prudence and debt sustainability remain concerns. It concludes that the state has considerable fiscal capacity but must improve expenditure, subsidy, and debt management, as well as productive capital expenditure, to sustain its finances over the long term.