Bihar, Jharkhand, West Bengal rank lowest as NITI Aayog grades states on investment appeal

A new national index scoring Indian states on how investor-friendly they are has placed Bihar, Jharkhand and West Bengal at the bottom of the large states category, while Gujarat took the top spot both among large states and nationally. NITI Aayog released the Investment Friendliness Index for states and Union Territories on Friday, built around eight pillars covering everything from infrastructure to regulatory ease.

The eight pillars used to score each state are infrastructure, business climate, resources, government policy, regulatory ease, institutional environment, financial health and environmental resilience. States and Union Territories were then grouped into three separate categories for comparison — large states, hilly and northeastern states, and city states and Union Territories — covering all 28 states and eight Union Territories in total.

Among the large states, Odisha, Madhya Pradesh and Andhra Pradesh occupied the fourth, fifth and sixth positions respectively, sitting above Bihar, Jharkhand and West Bengal, which rounded out the bottom of the table. At the very top, Gujarat scored 56.6 overall, ahead of Maharashtra’s 53.7 and Tamil Nadu’s 53.3.

NITI Aayog’s report attributed Gujarat’s lead to strong scores in infrastructure, business climate, financial health, regulatory ease and government policy, while flagging resources, institutional environment and environmental resilience as weaker areas. The state’s infrastructure score in particular was linked to efficient ports and power supply, competitive electricity tariffs and well-managed transmission and distribution losses. Maharashtra’s second place ranking came mainly from a strong business climate score, while Tamil Nadu’s third-place finish was built on infrastructure and business climate, with financial health flagged as needing improvement.

In the separate hilly and northeastern states category, Uttarakhand, Assam and Himachal Pradesh took the top three positions. Among city states and Union Territories, Lakshadweep ranked lowest overall, followed by Ladakh and the Andaman & Nicobar Islands.

NITI Aayog Vice Chairman Ashok Kumar Lahiri, releasing the report, said India’s investment rate stands at around 25% of GDP — lower than China’s during its period of fastest growth — and said the country needs a significant acceleration in investment to sustain broad-based, productivity-driven growth toward the government’s Viksit Bharat @2047 goals. The index was first proposed in the Union Budget for 2025-26 as a tool to strengthen competitive and cooperative federalism between states.

Mundra Port in Gujarat, whose infrastructure efficiency helped the state top the new rankings. Wikimedia Commons/by Felix Dance