PIB TrackerNITI Aayog's Investment Friendliness Index puts states at the core of India's growth story
NITI Aayog released the Investment Friendliness Index (IFI) — a data-driven framework to benchmark how effectively States and UTs create and sustain an investment-friendly environment, to spur competitive-and-cooperative federalism and state-level reforms in line with 'Viksit Rajya @2047'.
What happened
- NITI Aayog released the report 'Investment Friendliness Index (IFI)'.
- It offers a data-driven framework to assess how effectively States and UTs create and sustain an investment-friendly environment.
- The aim is to strengthen competitive and cooperative federalism and accelerate state-level reforms.
- It advances Viksit Bharat through 'Viksit Rajya @2047', placing States at the core of growth.
- It flows from NITI's 9th Governing Council (2024) and the Union Budget 2025-26 announcement.
For Prelims
- NITI Aayog: The National Institution for Transforming India — the government's apex public-policy think-tank (replaced the Planning Commission in 2015); its Governing Council includes all CMs.
- Investment Friendliness Index (IFI): A data-driven benchmark of States/UTs on the factors shaping ease of investment; announced in Budget 2025-26.
- Competitive federalism: States compete on reforms/performance to attract investment; cooperative federalism is Centre-State collaboration — the IFI promotes both.
- Viksit Rajya @2047: The idea that a developed India by 2047 requires developed States — hence state-level investment ecosystems.
- Related indices: Complements the earlier Ease of Doing Business/Business Reforms Action Plan (BRAP) state rankings.
- Why it matters: Much of the ground-level reform on land, labour, power and permits is a State subject — benchmarking nudges reform.
For UPSC: A strong economy-and-federalism item — a benchmark to drive state-level investment reforms via competitive-cooperative federalism. Use it for NITI Aayog's role, the ease-of-doing-business agenda, the Centre-State division on land/labour/power, and 'Viksit Rajya @2047'.
What it is NOT: This is a benchmarking index/report (a framework to nudge reform), not a binding ranking with rewards or a new investment scheme. It complements — it does not replace — existing ease-of-doing-business exercises.
For Mains
Syllabus: GS3.1 · GS2.2 · Linkage L2
Anchor
States as growth engines — benchmarking investment climate to drive competitive-cooperative federalism.
Substantiation (data)
NITI Aayog's Investment Friendliness Index benchmarks States/UTs on the ease of investment; tasked at the 9th Governing Council (2024), announced in Budget 2025-26; anchors 'Viksit Rajya @2047'.
Exemplification
A data-driven index nudging state reforms on infrastructure, regulation, land and labour — building on the BRAP/ease-of-doing-business tradition.
Problematisation
Indices can be gamed or ignored without incentives; genuine reform depends on state political will and capacity.
Way-forward
Pair benchmarking with hand-holding, share best practices, and link reforms to real investment and jobs outcomes.
Position
Empowering and benchmarking States is central to attracting investment and realising Viksit Bharat 2047.
Deploys into: Economy — Indian economy + federalism (GS3.1, GS2.2) · NITI Aayog's Investment Friendliness Index, competitive-cooperative federalism, ease of doing business, and 'Viksit Rajya @2047'.
NITI Aayog · 2026-07-17 · PRID 2285847 · PIB source ↗