India, March 12 -- Government think tank Niti Aayog on Wednesday urged state Governments to adhere to fiscal deficit norms under the FRBM Act through disciplined expenditure management, broadening the GST base, and enhancing their own tax capacity.

The Fiscal Responsibility and Budget Management (FRBM) Act aims to regulate the country's debt level by restricting fiscal and revenue deficits as a percentage of GDP. Niti Aayog's 2026 Fiscal Health Index (FHI) for 2023-24 suggests that states with widening revenue deficits should prioritise aligning revenue expenditure with sustainable revenue growth.

Odisha, Goa, Jharkhand, Gujarat, Maharashtra Chhattisgarh, Telangana, Uttar Pradesh, Karnataka and Madhya Pradesh have emerged as India's top...