Announced in the Union Budget 2025-26, the Index aims to strengthen the spirit of both competitive and cooperative federalism by encouraging states to adopt best practices and continuously improve their investment ecosystems.

Key Findings of the Report

• Evaluation Framework: Evaluates all 28 States and 8 UTs across 84 indicators grouped under 8 pillars (refer infographic).
• Performance Categories and Results: States are scored out of 100 and classified into four performance tiers:
  • Top Performers (Score > 50): Gujarat (Score 56.6), Maharashtra, Tamil Nadu, Goa and Odisha.
  • Frontrunners (Score 45–50): Delhi, Madhya Pradesh, Andhra Pradesh, etc.
  • Emerging Performers (Score 40–44.9): Bihar, Jammu & Kashmir, Punjab, etc.
  • Aspiring States (Score < 40): Arunachal Pradesh, Ladakh, Lakshadweep, etc.

• Peer-Group Rankings (3 Categories): 
  • Large States: Gujarat
  • Hilly and North-Eastern States: Uttarakhand
  • UTs and City States: Goa

Why Investments are Significant for Growth?

• Historical Driver of Growth: Investments have accounted for over half of India's economic growth since the economic reforms of 1992.
• Multiplier Effects: Capital investments stimulate industrialisation, drive innovation, build critical infrastructure, and generate large-scale employment. 
  • The Economic Survey 2022-23 estimated that economic output can increase by at least four times the amount of capital expenditure incurred.