New Delhi, March 27 -- States are a disproportionately critical unit of governance in India's federal structure. Unfortunately, they face severe challenges due to inadequate financial resources and limited capacity to advance equitable last-mile development. According to Niti Aayog's Fiscal Health Index 2025, most states are financially strained. The Reserve Bank of India (RBI) has also cautioned many of them about high deficits. This fiscal pressure, compounded by populist spending, restricts governments' ability to meet foundational development needs.

Artificial intelligence (AI) can serve as a powerful equalizer by bridging gaps in resource allocation and outcomes between states across sectors like education, agriculture, healthcare a...