Andhra Pradesh moved down the state of Tamil Nadu, to the fourth position in attracting the fresh investments. A survey conducted by the National Council of Applied Economic Research (NCAER) has put Gujarath, Delhi and Tamil Nadu as the top three states as the preferred destination for fresh investments in India. NCAER, a New Delhi based economic policy research institute , released N-State Investment Potential Index (N-SIPI) for 2016. The N-SIPI which cover all Indian states and Delhi union territory, is released in March every year. And the report is considered as a credible yardstick of how the investment climate of India’s states changing.
The NCAER State Investment Potential Index provides a composite indicator of how India’s States are positioned to encourage and attract investment, bridging the many information gaps surrounding questions of what, how much and where to invest.
Incidentally a similarly study done by government of India’s Department of Industrial Policy and Promotion (DIPP) ranked Andhra Pradesh as the second state after Gujarat as top two performers. As per the ranking, given based on the success rate of states in implementing the 98 regulatory reforms by the DIPP in last September, Jharkhand is the third best performer. On the other hand, NCAER puts Jharkhand at the bottom along with the two BIMARU states Uttar Pradesh and Bihar. Another noteworthy point of the report is that the ranks go haywire if criterion of Industry Perception’s is included or excluded.
The NCAER 2016 consists of two indices, N-SIPI 21, in which 20 states and Delhi union territory are taken into consideration, and N-SIPI 30 which takes into account 29 states and Delhi, union territory. The N-SIPI 21 is based on five pillars – labour, Infrastructure, Economic Climate, Governance &Governance, and Industry perception. On the other hand N-SIPI 30 omits the fifth pillar, Industry Perception.
The study indicates that Perception of the Industry is pushing the state of Andhra Pradesh to the higher ranking. As per N-SIPI (with Industry perception), the top five performers are Gujarat,Delhi, Tamil Nadu, Andhra Pradesh and Maharastra. Next set of five performers are Karnataka, Chhattisgarh, Uttarakhand, Rajastan and Kerala.
In the N-SIPI 30, where industry perception is omitted this ranking gets disturbed much to the disappointment of best performers in DIPP and N-SIPI 21 lists. In N-SIPI 30, Gujarat slips to second position and Andhra Pradesh disappears from the top five. It has fallen below Karnataka to the seventh position. The rankings in N-SIPI 30 are like this: top ten performers are Delhi, Gujarat, Tamil Nadu, Goa and Maharashtra and the next set of five states are Karnataka, Andhra Pradesh, Kerala, Uttarakhand and Odisha.
