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Launch of NCAER's State Investment Potential Index
March 8, 2016

The National Council of Applied Economic Research, NCAER, released a new NCAER State Investment Potential Index (N-SIPI) at a full-day launch workshop inaugurated by Ramesh Abhishek, Secretary, Department of Industrial Policy and Promotion (DIPP) in the Ministry of Commerce and Industry.  Covering all 29 States and the Delhi Union Territory, NCAER will release N-SIPI in March every year as a credible yardstick of how the investment climate of India’s States is changing. Gujarat and Delhi top the list of states in 2016 on the first N-SIPI index.


India is currently the fastest growing large economy globally. These global trends and the NDA Government’s focus on creating a more friendly investment climate are expanding opportunities for doing business in India. These opportunities inevitably lie in India’s States, influenced not just by New Delhi’s policies but conditioned very much by what is happening in each State.  N-SIPI measures each State’s investment climate and will track it over time.  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.  It will provide an entry point for domestic and overseas investors in thinking about their investment decisions and will also encourage a more competitive ethos among India’s States. 


N-SIPI complements the policy initiatives of the Modi Government on its Make in India, Skill India, and Start-up India campaigns by helping guide potential domestic and overseas investors with relevant, high-quality data and analysis of the policy framework in each State. N-SIPI fully complements the Government of India’s initiative through DIPP to improve India’s ranking on the Ease of Doing Business Index of the World Bank. The Ease of Doing Business index is much more procedure- and transactions-driven, while N-SIPI focuses on the policy and structural backdrop that determines the business environment in any State.  N-SIPI complements the work of DIPP with the States on their September 2015 assessment of how the States had implemented DIPP’s 98-point action plan to improve the ease of doing business and the resulting 340-point Business Reform Action Plan for 2016.  


While launching N-SIPI, Mr Ramesh Abhishek, Secretary, Department of Industrial Policy and Promotion, observed that while the results and rankings of the NCAER report are different from the DIPP survey conducted last year, both their contents supplement each other and function as vital platforms for assessing investment potential of the states. He noted the significance of this work, highlighting the fact that the “criteria for gauging the investment potential of States used in the NCAER N-SIPI—among them, labour and infrastructure conditions, economic conditions, governance and political stability, and industry perceptions—complement the parameters that DIPP considers important for assessing the business potential of states. The NCAER Report is also significant in that it provides useful feedback from industry and business regarding the pace and implementation of reforms in the states.”


NCAER’s 2016 N-SIPI consists of two indices, N-SIPI 21 and N-SIPI 30.  N-SIPI 21 covers 20 States and the Delhi Union Territory, and in addition to being based on four pillars–labour, infrastructure, economic cli