Investment Friendliness Index To Create Healthy Competition Among States

ENA Sectors 2025-02-03 15:05:59 New Delhi, Feb 3 (KNN) The government is preparing to introduce an Investment Friendliness Index to foster competition among states in attracting private investments, according to Expenditure Secretary Manoj Govil. The Finance Ministry will collaborate with Niti Aayog and the Department for Promotion of Industry and Internal Trade (DPIIT) to establish the parameters for this new evaluation framework. The initiative, announced in the 2025-26 Budget, aims to advance the principles of competitive cooperative federalism. Govil, in an interview with PTI, explained that while significant regulatory reforms have been implemented at the central level, investors have indicated a need for similar improvements at the state level. The index is designed to encourage states to evaluate their regulatory frameworks and identify potential barriers to investment. According to Govil, the primary objective is not to create a hierarchical ranking system but rather to motivate states to examine their existing rules, regulations, and procedures. This self-assessment would help states identify which policies investors find challenging or impractical, and understand how these factors affect their ability to attract investment. The Department of Economic Affairs, along with Niti Aayog and DPIIT, will determine the timeline for the index's launch. The Expenditure Secretary emphasized that the index's criteria remain under development. He illustrated the potential benefits using an example: states requiring fifteen procedures for factory establishment could learn from those requiring only five, leading to more streamlined processes across the country. Govil stressed that state governments would need to take the lead in identifying and addressing investor concerns. Currently, the DPIIT conducts annual state rankings focused on ease of doing business and evaluates states and union territories across various parameters, including logistics infrastructure, services, and regulatory environment. This new index would complement existing assessment frameworks while specifically targeting investment-friendly policies and procedures. (KNN Bureau) 40921 https://knnindia.co.in/news/newsdetails/sectors/investment-friendliness-index-to-create-healthy-competition-among-states 2025-02-03 15:05:59 knnindia.co.in Investment Friendliness Index To Create Healthy Competition Among States