NITI Aayog Releases Investment Friendliness Index Report
UPSC / SSC current affairs note · Polity
Why in news
The NITI Aayog has released the Investment Friendliness Index (IFI) report, following a mandate from the Prime Minister in July 2024 and an announcement in the Union Budget 2025-26. This index aims to foster competitive and cooperative federalism by evaluating and encouraging reforms at the state level to attract investment.
Background
India aims to become a developed nation by 2047 (Viksit Bharat @2047). While central reforms set the overall policy framework, state-level factors like infrastructure, regulatory efficiency, and policy predictability are crucial for investment decisions. The IFI is designed to assess and improve state investment ecosystems.
Key facts
The Investment Friendliness Index (IFI) was developed by NITI Aayog following a directive from the Prime Minister during the 9th Governing Council meeting in July 2024.
The Union Budget 2025-26 announced the creation of the IFI to encourage reforms and promote competitive and cooperative federalism.
The IFI evaluates states and Union Territories on their effectiveness in creating, enabling, and sustaining a favorable investment environment.
It assesses key policy, institutional, regulatory, and infrastructure parameters that influence investment decisions.
The index covers all 28 states and 8 Union Territories.
The IFI is structured around eight pillars (details not provided in the source).
The index aims to identify strengths, highlight areas for improvement, promote best practices, and encourage mutual learning among states.
It is intended to boost India's competitiveness and attract more domestic and foreign investment to sustain high economic growth.
The IFI serves as a catalyst for reforms, going beyond performance rankings.
Prelims pointers
- Investment Friendliness Index (IFI)
- NITI Aayog
- Viksit Bharat @2047
- Competitive and Cooperative Federalism
- Union Budget 2025-26
- 8 pillars (details not specified)
- 28 states and 8 UTs covered
Mains angles
- Discuss the role of state-level reforms in attracting investment and achieving the vision of Viksit Bharat @2047.
- Critically examine how the Investment Friendliness Index can promote competitive and cooperative federalism in India.
- Analyze the significance of data-driven frameworks like IFI in improving the investment ecosystem and economic growth.