Investment
Friendliness Index (IFI)
Prelims:
Indian Economy, Government Policies & Indices
Mains:
GS Paper
II- polity and governance, GS Paper III-Indian Economy
Current relevance:
NITI
Aayog has released the
Investment Friendliness Index (IFI) to assess and benchmark the investment
ecosystem across States and Union
Territories.
Highlights:
1.
Background:
Union Budget 2025-26 announced
the development of an Investment
Friendliness Index to strengthen the spirit of competitive and cooperative federalism by promoting reforms and
fostering a conducive investment ecosystem across States.
2.
Definition:
I.
IFI presents a structured and data-driven framework for assessing how effectively
States and Union Territories create, enable, and sustain an environment
conducive to investments.
II.
The Index evaluates key policy, institutional, regulatory, and infrastructure-related parameters that
influence investment decisions and provides a comparative assessment of the
investment ecosystem across States and
Union Territories.
3.
IFI
Evaluates investment attractiveness across the following Eight pillars:
I.
Infrastructure
II.
Business climate
III.
Resources
IV.
Government policy
V.
Regulatory Ease
VI.
Institutional Environment
VII.
Financial Health; and
VIII.
Environment resilence
4.
Performance
Categories
I.
States
and Union Territories have been classified into four performance categories:
·
Top Performers (scores above 50)
·
Frontrunners (45–50)
·
Emerging Performers (≥40 – <45)
·
Aspiring States (below 40)
II.
Overall Top Performers are Gujarat,
Maharashtra, Tamil Nadu, Goa, Odisha.
III.
Among the Large States,
Gujarat secured the first rank, followed by Maharashtra and Tamil Nadu.
IV.
In the Hilly and
North-Eastern States category, Uttarakhand
emerged as the highest-ranked State, followed by Assam and Himachal Pradesh
V.
City States and Union
Territories,
Goa secured the top position,
followed by Delhi and Chandigarh.
5.
State Profiles:
I.
The report provides detailed State Profiles that offer a
comprehensive assessment of the investment ecosystem of each State and Union
Territory across the eight pillars of the Investment Friendliness Index.
II.
Highlights the key indicators and factors that contribute
to a state’s investment performance.
·
Identifying areas requiring policy attention
·
Insights of investor perspective
·
Balanced and evidence-based assessment
·
Acts as tool for policymakers, for targeted reforms
·
Enable investor to understand investment climate of the particular
state
The Investment Friendliness
Index is therefore envisaged not merely as a periodic assessment exercise, but
as a strategic reform instrument that will guide States in strengthening
their investment ecosystems over time.
Source:
PIB- https://www.pib.gov.in/PressReleasePage.aspx?PRID=2285847®=48&lang=1