Delhi has got top slot in the National Council for Applied and Economic Research (NCAER)’s 2018 State Investment Potential Index (N-SIPI). N-SIPI evaluates the competitiveness and investment climate of Indian states, serving as a comprehensive reference for policy makers, existing businesses, and potential investors. The 2018 Index ranked 21 principal States under six key areas – Land, Labour, Infrastructure, Economic Climate, Governance and Political Stability, and Business Perceptions.
Rankings and Key Shifts
Previously ranked at number one, Gujarat slipped to the third position, whilst Tamil Nadu moved up the ranks, placing second. As per the overall rankings, Delhi, Tamil Nadu, Gujarat, Haryana, Maharashtra, and Kerala were declared the most attractive States for conducting business.
On the contrary, Odisha, Uttar Pradesh, Assam, Jharkhand, and Bihar fell at the tail end of the list. The most notable shift was made by Tamil Nadu which ascended four places.
The Primary Constraints
Out of 1,049 business enterprises that were contacted, 55 per cent identified the law and order situation as the main impediment. Interestingly, corruption, which was recognized as a major constraint by 57 per cent respondents in the 2017 survey, saw a decrease with 46 percent identifying it as a significant obstacle in 2018.
Additional substantial constraints highlighted by respondents included difficulties in obtaining land approvals, the transition to the Goods and Services Tax (GST), the quality of skilled labour, acquiring all necessary clearances before initiating business operations, and access to finance.
However, industry-related policies and availability of unskilled labour were not deemed as problematic. Furthermore, the availability of power and raw materials, along with rail and road quality and connectivity, were regarded as the least problematic issues for the businesses in the sample.
About National Council for Applied and Economic Research (NCAER)
Established in 1956, NCAER stands as India’s oldest and largest independent, non-profit economic policy research institute. It is amongst a few globally acknowledged think tanks which blend rigorous analysis, policy outreach, and extensive data collection capabilities – particularly for household surveys. NCAER launched the N-SIPI series in 2016 and unveiled the second N-SIPI in 2017.
