Budget 2025: Govt To Introduce Investment Friendliness Index For States

Finance minister Nirmala Sitharaman in her Union Budget 2025 speech said that the government will launch an Investment Friendliness Index for states.

“An Investment Friendliness Index of states will be launched in 2025 to further the spirit of competitive, cooperative federalism,” the finance minister said. 

The initiative is aimed at assessing and ranking Indian states based on their investment potential, alongside fostering competitive and cooperative federalism among the states. 

The announcement in the Budget today came a day after an ET report said that NITI Aayog is set to launch an index to rank states on their investment potential based on opportunity and associated risks.

Alongside this, it was also reported that NITI Aayog will roll out an investor-friendly charter for states. The charter will constitute modification of laws, reforms related to the requirement of clearances and licensing, ensuring availability of land through land banks, availability of electricity and water, and appropriate incentives to attract investments.

The finance minister also announced other measures like new reforms to improve the ease of doing business in the country to increase capital inflows. 

Alongside this, a new urban challenge fund of INR 1 Lakh Cr will be established to support projects that promote cities as growth hubs and facilitate creative redevelopment. 

Besides, a new Fund of Funds for startups was also announced with an additional INR 10,000 Cr corpus. The government will also launch a National Manufacturing Mission to support small, medium and large enterprises under the Make in India initiative.