Investment Friendliness Index: Gujarat, Maha, TN on top, Pg15

Key Highlights:

• NITI Aayog has released its new Investment Friendliness Index 2026, evaluating states and Union Territories on their attractiveness for investment.
• Gujarat, Maharashtra, Odisha, Tamil Nadu, and Goa have emerged as the top-performing states in the index.
• The index assesses states based on eight parameters, with infrastructure carrying the highest weightage of 25%.
• Ashok Lahiri, Vice Chairman of NITI Aayog, noted India's investment rate at around 25% and referenced the Incremental Capital-Output Ratio (ICOR) in comparison to China's growth.

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Detailed Insights:

• The Investment Friendliness Index 2026 covers all 28 states and 8 Union Territories, aiming to identify both investment attractions and challenges.
• Key parameters beyond infrastructure include business climate, resources, government policy, regulatory ease, financial health, institutional environment, and environmental resilience.
• States are categorized into "top performers," "frontrunners" (e.g., Andhra Pradesh, Assam, Delhi), "emerging performers" (e.g., Bihar, Punjab), and "aspiring states" (e.g., Andaman & Nicobar Islands, Manipur).
• The index serves as a diagnostic tool for states to identify areas for improvement rather than merely a ranking exercise.
• NITI Aayog functions as a policy think tank, providing strategic and technical advice to foster cooperative federalism and guide economic development.

Key Concepts Involved:

• NITI Aayog: The premier policy think tank of the Government of India, established in 2015, providing strategic and technical advice to the Centre, States, and UTs.
• Investment Friendliness Index: A framework developed by NITI Aayog to assess the effectiveness of states and UTs in creating an environment conducive to attracting and sustaining investments.
• Incremental Capital-Output Ratio (ICOR): An economic metric that indicates the amount of additional capital required to produce one additional unit of output, reflecting the efficiency of investment.