HomeEconomyInvestment Friendliness Index of states to be launched in 2025: FM Sitharaman

Investment Friendliness Index of states to be launched in 2025: FM Sitharaman

Finance minister Nirmala Sitharaman on Saturday said the government will come up with an Investment Friendliness Index of states in 2025 to further the spirit of competitive cooperative federalism.

ET had reported on Saturday that the government think-tank NITI Aayog is developing an investment index that will rank states on the basis of their investment efficacy.

The idea is to create competition among states to attract investments and the government is hopeful that ranking the states on identified indicators and periodic monitoring will help improve the overall investment climate in the country.

The index will rank states around two primary dimensions of opportunity and risk. Both these will have at least four sub indicators to rank the performance of states.

The sub-indicators under the opportunity dimension, which will have a weightage of 65%, will include state government’s policy and incentives, infrastructure, business climate and innovation and available resources with the states.


The risk dimension, on the other hand, will have a weightage of 35% and will include pillars like natural risk, regulatory risk, financial risk and institutional effectiveness. In addition to the above, in all four sub-categories of opportunities and risks, a few perception based indicators will also be included to measure how investors perceive and prioritize opportunities and risks, or to assess the quality of investor experience on certain rules and regulations.

Content Source: economictimes.indiatimes.com

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