Gujarat Emerges Top Performer In NITI Aayog's Investment Friendliness Index

New Delhi, Jul 18 (KNN) Gujarat has emerged as the top-performing state in NITI Aayog's Investment Friendliness Index, followed by Maharashtra and Tamil Nadu, with the policy think tank positioning the index as a reform tool to help states improve their investment climate rather than merely a ranking exercise.

Speaking at the Investment Friendliness Index report launch, NITI Aayog CEO Nidhi Chhibber said the index is designed to enable states to benchmark their performance, identify priority areas for reform and learn from best practices adopted by other states.

States Key To Achieving Viksit Bharat
CRISIL Chief Economist D.K. Joshi said India needs faster economic growth and a higher investment ratio to achieve the goal of Viksit Bharat, noting that private investment remains subdued.

He emphasised that states have a critical role in driving growth through stronger partnerships between governments and industry, describing the country's development journey as a ‘growth marathon.’

This report is prepared by NITI Aayog in partnership with CRISIL.

Gujarat Leads Rankings
Five states, Gujarat, Maharashtra, Tamil Nadu, Goa and Odisha, were classified as top performers. Fifteen states, including Delhi, Uttar Pradesh and Andhra Pradesh, were placed in the ‘Frontrunners’ category, while eight states and Union Territories each were categorised as ‘Emerging Performers’ and ‘Aspiring States.’

To account for structural differences, the assessment grouped jurisdictions into three categories: large states, hilly and northeastern states, and city states/UTs.

Among large states, Gujarat secured the top position with a score of 56.6, followed by Maharashtra (53.7) and Tamil Nadu (53.3). Gujarat's performance was attributed to efficient port operations, a competitive power sector and a favourable business environment.

Maharashtra performed strongly in attracting private equity and venture capital investments and recorded the highest number of Atal Tinkering Labs, while Tamil Nadu ranked highly for infrastructure, business climate, export performance and conversion of investment proposals into projects.

Category-Wise Performance
Among hilly and northeastern states, Uttarakhand, Assam and Himachal Pradesh emerged as the leading performers.

In the city states and Union Territories category, Goa, Delhi and Chandigarh ranked highest.

MSME and State-Specific Observations
The report identified areas for improvement across several states.

For Bihar, it noted that bank credit to industry stands at around 6.7 percent of GSDP, indicating scope to improve access to finance. The state also ranked 32nd in the share of medium and small enterprises within its MSME base, highlighting the need for a stronger industrial ecosystem.

Dadra and Nagar Haveli and Daman and Diu ranked fifth among city states and UTs with an overall score of 37.1, performing well in regulatory ease and business climate. It ranked first nationally in the proportion of micro and small enterprises within its MSME base.

The report observed that Himachal Pradesh could improve by increasing capital expenditure and attracting higher investment, while also expanding the share of medium and small enterprises within its MSME ecosystem.

For Rajasthan, the report recommended greater focus on workforce skilling, job creation and entrepreneurship development, particularly for startups and MSMEs.

In Telangana, it suggested simplifying documentation and compliance processes to support first-time entrepreneurs and MSMEs.

The report also noted that West Bengal has launched several initiatives aimed at generating employment through the expansion of the MSME sector.

NITI Aayog has invited feedback from stakeholders on the report to further strengthen the assessment framework.

(KNN Bureau)