GUWAHATI: Assam has emerged as the highest-ranked state in the Northeast in NITI Aayog’s inaugural Investment Friendliness Index (IFI), securing the 14th position 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.
Reacting to the ranking, Chief Minister Himanta Biswa Sarma said Assam had earned the "Frontrunner" status due to the state's stable, industry-friendly policies, customised incentives, and sustained improvements in law and order and infrastructure.
Assam was placed in the Frontrunners category, just short of the Top Performers bracket, which requires a score above 50. In the separate Hilly and Northeastern States category, comprising 12 hill and northeastern states, Assam finished second with a score of 47.3, narrowly behind Uttarakhand (47.5) and ahead of Himachal Pradesh.
According to the report, Assam's performance was driven by strong government policies, a favourable institutional environment, sound financial management, and minimal labour-related disruptions. Among the hilly and northeastern states, Assam recorded the highest score in the Government Policy pillar, securing 4.9 out of 10.
The report also highlighted Assam's sustained investment in road infrastructure. Between 2019 and 2024, the state allocated around 8 per cent of its annual expenditure to road development, significantly higher than the national average of about 3 per cent.
Education spending was another area where Assam stood out. The state devoted an average of 18 per cent of its annual budget to education during the same period, well above the regional average of around 12 per cent. However, the report noted that this investment has yet to translate into a stronger technical workforce, with the addition of skilled technical workers remaining below the national average.
On fiscal health, the report said Assam's interest payments accounted for 2.8 per cent of its 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, Tripura followed Assam with a score of 45.0, also earning Frontrunner status. Meghalaya (43.0) and Nagaland (41.2) were classified as Emerging Performers, while 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 in the Regulatory Ease pillar among hilly and northeastern states, scoring 8.5 out of 12, matching Goa in the city states and Union Territories category.
The Investment Friendliness Index is NITI Aayog's first nationwide assessment of the investment climate across states and Union Territories. It evaluates 36 states and UTs across eight pillars—infrastructure, business climate, resources, government policy, regulatory ease, institutional environment, financial health and environmental resilience—using 84 indicators.
The states and Union Territories were grouped into 17 large states, 12 hilly and northeastern states, and seven city states and Union Territories.
None of the 36 entities assessed scored above 60 out of 100. Five states—Goa, Gujarat, Maharashtra, Odisha and Tamil Nadu—qualified as Top Performers with scores above 50. Fifteen states were classified as Frontrunners, while eight each were placed in the Emerging Performers and Aspiring States categories.
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 last overall, followed by Ladakh and the Andaman and Nicobar Islands.
Releasing the report, NITI Aayog Vice Chairman Ashok Kumar Lahiri said India's investment rate currently stands at around 25 per cent, lower than China's at a comparable stage of economic development. He stressed that much of the reform needed to raise investment levels now rests with the states rather than the Centre.
NITI Aayog said the index is intended to serve as a practical tool for policymakers and investors by identifying reform priorities and providing an evidence-based comparison of investment conditions across states.
The report also carries a disclaimer stating that while due diligence was exercised in compiling data from multiple sources, NITI Aayog does not independently verify the authenticity of the data or the methodology used. Responsibility for both rests with Crisil, which prepared the report under NITI Aayog's Research Scheme.