NITI Aayog Investment Index: Assam Ranks 14th Nationally, Tops Northeast With 47.3 Score

Guwahati, July 18: Assam has emerged as the best-performing state in the Northeast in NITI Aayog’s inaugural Investment Friendliness Index (IFI), securing the 14th position nationally among 36 states and Union Territories with an overall score of 47.3.

The index, prepared by Crisil under NITI Aayog’s Research Scheme, was released in New Delhi on July 17.

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Reacting to the ranking, Chief Minister Himanta Biswa Sarma said Assam had emerged as a “Front Runner” in the index due to stable and industry-friendly policies, customised incentives, and improvements in law and order and infrastructure.

Assam was placed in the “Frontrunners” category, just below the “Top Performers” bracket, which requires a score above 50. In the separate category of hilly and northeastern states, where 12 states including non-northeastern hill states were assessed together, Assam finished second with 47.3, narrowly behind Uttarakhand (47.5) and ahead of Himachal Pradesh.

The report attributed Assam’s performance to strong government policy, a favourable institutional environment and sound financial management, with minimal disruption from labour issues. Among hilly and northeastern states, Assam recorded the highest score in the government policy pillar at 4.9 out of 10.

One of the state’s key strengths, according to the report, was sustained public investment in road infrastructure. Assam allocated around 8 per cent of its annual expenditure to roads between 2019 and 2024, compared with the national average of about 3 per cent.

Education spending was another area highlighted in the report. Assam devoted an average of 18 per cent of its state budget to education during the same period, significantly higher than the regional average of around 12 per cent.

However, the report noted that this had not yet translated into a strong technical workforce, with the addition of new technical workers remaining below the national average.

On financial health, the report said interest payments accounted for 2.8 per cent of Assam’s Gross State Domestic Product (GSDP), around 24 per cent lower than the comparable national figure, indicating relatively manageable debt servicing costs.

Among other northeastern states in the hilly and northeastern category, Tripura followed Assam with a score of 45.0, placing it in the Frontrunners bracket. Meghalaya (43.0) and Nagaland (41.2) were classified as “Emerging Performers”. Mizoram (39.9), Arunachal Pradesh (37.5), Sikkim (36.6) and Manipur (32.3) were placed in the “Aspiring States” category.

Meghalaya recorded the joint-highest score nationally on the regulatory ease pillar among hilly and northeastern states at 8.5 out of 12, matching Goa in the city-states and Union Territories category.

The Investment Friendliness Index is NITI Aayog’s first exercise aimed at ranking states and Union Territories on their ability to create and sustain an environment conducive to investment. It evaluates 36 states and Union Territories across eight pillars — infrastructure, business climate, resources, government policy, regulatory ease, institutional environment, financial health and environmental resilience — using a total of 84 indicators.

States were grouped into three categories: 17 large states, 12 hilly and northeastern states, and seven city states and Union Territories.

None of the 36 entities assessed crossed a score of 60 out of 100. Five states qualified as Top Performers with scores above 50 — Goa, Gujarat, Maharashtra, Odisha and Tamil Nadu. Fifteen states were classified as Frontrunners, while eight each were placed in the Emerging Performers and Aspiring States categories.

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Gujarat topped the large-states category with a score of 56.6, followed by Maharashtra and Tamil Nadu. Goa led the city-states and Union Territories category, while Lakshadweep ranked lowest overall, followed by Ladakh and Andaman and Nicobar Islands.

Releasing the report, NITI Aayog Vice Chairman Ashok Kumar Lahiri said India’s current investment rate stood at around 25 per cent, lower than China’s rate at a comparable stage of economic development. He stressed that much of the reform work needed to raise investment levels now rests with the states rather than the Centre.

NITI Aayog said the index was designed as a tool for both policymakers and investors, offering a structured basis for prioritising reforms and providing investors with an evidence-based comparison of investment conditions across states.

The report carries a disclaimer stating that while due care was taken in compiling data from various sources, NITI Aayog does not independently verify the authenticity of the data or the accuracy of the methodology used. Responsibility for the data and methodology rests with Crisil, which prepared the report under NITI Aayog’s Research Scheme.

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