Investment Friendliness Index - A take

Recently, NITI Aayog has released an Indicator - Investment Friendliness Index (IFI) 2026 - which is an outcome of 8 broader pillars taken into consideration. While the report has been released for the first time, it is a good initiative to understand the differences between the Indian states in terms of absorbing & perpetuating the economic growth.

Any modern economy aspire to grow its GDP to improve the lives of the people. As the economic activities increase, the volume of businesses in the region flourishes. This would accelerate the cycle of both demand & supply. As more people would earn from the profitable businesses, their consumption of various articles like food, cloths, gadgets would increase. As people would earn more, it would attract both inter & intra region migration. There would be increased need of infrastructure like – housing, roads & highways, malls, educational institutions, recreational facilities, hospitals and so on. Why so? Because people would be able to pay for it.

But, how does this gets stabilized? How does businesses prevent themselves from the negative elements like – default on payments, productivity losses due to no electricity, slow internet facilities, accidents due to the potholes in the roads etc. Traditionally, government would take a higher interest in the developmental activities of the region. They are also responsible for maintaining the law & order, for the regulation, enablement and so on. Let’s say that there is a truck full of finished goods being on the way of delivery to a client & one the way it got looted and there is no one to be held accountable! There are also activities like – low enforcement of the lawful way of doing businesses, land encroachments, detrimental pollutions. With lesser safeguard guarantee, how would it make the new investors to come and invest their hard-earned capital into the region?

With greater economic activities, the average income of the population of the region grows. However, the report doesn’t speak about the equality of the income of the people.

State-wise difference in the indicator is important to notice. Why is that one state is scoring higher than the other state? Clearly, there is a lot to ponder upon the fact that only 6 states together form 85% of the net FDI inflow into the Indian economy. What should the state & central governments do that with capital-thirst states inviting the investments in turn help the economy to keep growing at greater than 7.8% rate of GDP? 

Is benevolent investment on the economy a way forward? I feel that it is deeper than that. Nowadays, as more people are speaking about "civic sense". It's not only about not spitting in the public spaces and not following the traffic. It's a broader term. Am I accountable enough for my country and my people? Not caring about the competition of the increasing GDP is ok, until unless it is not haphazard. We may not afford to keep cutting the existing green vegetation. We may not want to keep tolerating the bad politicians. We may not want to keep giving freebees in the name of socialism. Country has been doing it since we became independent 8 decades back. We are not sure, how much of those benevelont investments have actually converted into benevolent developments. I guess, there are just so many leakages.

Making system leak free should be our greatest priority. Our country and countrymen need to make sure that the capital invested into the economy is 100% leak free, that no one is taking a partake and building their individual assets and that taxpayers money is respectfully invested back into the economy.