Telangana climbs to 7th in Niti Aayog’s fiscal health index

Hyderabad: Telangana has strengthened its position among India's better-managed states in public finances, moving up to seventh place nationally and retaining its ‘front runner' status in the latest fiscal health index released by NITI Aayog for 2026. Based on fiscal data for 2023-24, Telangana was grouped with six other states in the second-tier category of fiscal performers. The top ‘achiever' category included Odisha, Goa and Jharkhand, while the lowest ‘aspirational' category featured Kerala, Punjab, West Bengal and Andhra Pradesh. States were assessed across four broad categories of fiscal performance: Achievers (top tier), front runners, performers, and aspirational. The front runner group included Maharashtra, Gujarat, Uttar Pradesh, Karnataka, Madhya Pradesh and Chhattisgarh, alongside Telangana. "Telangana's fiscal performance has improved over time. The state has been able to sustain its own efforts, and subsidy payments are now relatively balanced. However, attention needs to be given to the revenue deficit. Borrowing should not be used to meet revenue expenditure; such spending must be supported through revenue receipts. Restoring this balance will be important going forward," Amrendra Pandey, associate professor, Kautilya School of Public Policy, Gitam University, Hyderabad, told TOI.Telangana improved its position in the national rankings, climbing from eighth place in 2022-23 to seventh with a score of 44.3, strengthening its standing. In contrast, Andhra Pradesh was ranked 17th with a score of 23.1. The index also examined how effectively states spend public money. On the quality of expenditure indicator, Telangana scored 57.1, placing it in the achiever category. The score reflected relatively efficient spending, particularly on developmental programmes and capital projects. Andhra Pradesh recorded a score of 43.1 in this parameter, placing it in the mid-level front runner category. In debt management too, Telangana performed relatively well, securing a score of 53.5 and a front runner classification. The score indicated better management of debt and lower servicing stress. Andhra Pradesh scored 36.6 in this segment, placing it in the performer category. Area of concernDebt sustainability, however, emerged as an area of concern for several states. Telangana scored 20.0 on this indicator, while Andhra Pradesh recorded 4.2, suggesting that both states still have room to improve the long-term sustainability of their public finances. According to the report, Telangana has steadily increased spending on social and economic services, signalling a strong emphasis on welfare programmes and infrastructure creation. Capital expenditure in the state has grown significantly — by more than 160% — pointing to a sustained focus on building assets and strengthening public infrastructure. Overall, the findings suggested that Telangana has maintained a reasonably stable fiscal position, balancing welfare spending with infrastructure investment while keeping fiscal risks manageable. This steady approach to public finance management helped the state move up from eighth to seventh position in the national rankings.