States' investment friendliness index expected to come in two months: NITI Aayog member Arvind Virmani

NITI Aayog member Arvind Virmani has said that work on the second phase of the investment friendliness index of states is in progress and it is expected to be released in a month or two. The Union government in its FY26 Budget announced the launch of the 'Investment Friendliness Index of States' in 2025 to further the spirit of competitive cooperative federalism. This index will motivate states to review regulations to identify what is impeding investment. The initiative aims to promote healthy competition among states to attract private investment.

The Ministry of Finance is working on the parameters related to 'Investment Friendly Index of States' in consultation with NITI Aayog and the Department for Promotion of Industry and Internal Trade (DPIIT).

In an interview with PTI-Bhasha, Virmani said, "The first phase of preparing the index has been completed. Work is going on in the second phase. In this, suggestions are being taken from the industry. The opinion of the industry is important in the index because they have to make the investment. Necessary improvements will be made in it based on the suggestions."


About the expected timeline for the release of the index, he said, "I cannot give any specific date about this. But the index is expected to be released in a month or two."

Virmani said, "The prime minister had instructed us that all states should get the benefit of FDI (Foreign Direct Investment) and private investment. Overall, all states will benefit from this and investment and manufacturing will increase. Overall, the economy of the states will get a boost. They will be able to tell their strengths in this and work will be done to correct the shortcomings."

Earlier, Expenditure Secretary Manoj Govil had told PTI that several regulations and reforms have been done at the Centre level but some investors feel similar reforms are needed at the state level too.

"The main idea behind this index is not to rank states and say which one is good or bad. Its purpose is to motivate states to look at their own rules, regulations and procedures. To help them figure out which rules investors find practical or difficult...," Govil said.