Bhubaneswar: Odisha has emerged as one of India’s leading investment-ready states by securing the fourth position among 17 large states in NITI Aayog’s inaugural Investment Friendliness Index. The state scored 52.4 points, placing it among the country’s top-performing states for creating an enabling investment environment through sound policies, fiscal management and resource availability.
The index, which evaluates the investment readiness of states and Union Territories, recognised Odisha’s strong performance in key governance and policy parameters, highlighting the state’s growing reputation as an emerging destination for industrial and infrastructure investments.
Among India’s Top Five Investment-Friendly States
According to the report, Odisha is one of only five states to score above the 50-mark, joining:
- Gujarat – 56.6
- Maharashtra – 53.7
- Tamil Nadu – 53.3
- Goa – 53.1
- Odisha – 52.4
With this ranking, Odisha outperformed several major states and established itself as one of the country’s most investment-friendly destinations.
At the other end of the rankings, Bihar and Jharkhand were placed among the lowest-performing large states.
Strong Performance In Policy And Fiscal Management
The report credited Odisha’s high ranking to its robust performance in areas such as:
- Fiscal health
- Natural resource management
- Government policy framework
- Investment facilitation
- Administrative support
These strengths reflect the state’s sustained efforts to improve governance, streamline policies and create a business-friendly environment capable of attracting domestic and global investors.
Investment Inflows Still Lag Behind Potential
Despite its impressive ranking, the report noted that Odisha continues to face challenges in converting its policy strengths into higher levels of actual investment.
According to a Business Standard report, while Odisha performs strongly on institutional and policy indicators, capital inflows remain relatively modest compared to some higher-investment states. This suggests that implementation challenges, project execution timelines and investor preferences continue to influence investment decisions.
Experts believe that improving last-mile implementation, strengthening industrial infrastructure and accelerating project clearances could help the state translate its investment readiness into larger investment commitments.
Comprehensive Assessment Across Eight Pillars
NITI Aayog assessed 28 states and eight Union Territories using a 100-point evaluation framework based on 84 indicators spread across eight key pillars. These included:
- Infrastructure
- Regulatory ease
- Fiscal management
- Governance
- Resource availability
- Institutional support
- Business environment
- Investment ecosystem
The assessment combined secondary government data with extensive stakeholder feedback, including surveys of nearly 1,850 investors and consultations with 165 industry and policy stakeholders.
Benchmarking India’s Investment Ecosystem
The Investment Friendliness Index has been introduced as a benchmark to measure the current investment preparedness of states and encourage healthy competition in attracting businesses and industries.
Interestingly, no state crossed the 60-point mark, indicating significant scope for improvement across the country.
Among other categories, Uttarakhand topped the rankings among the 12 hilly and northeastern states with a score of 47.5, while Goa emerged as the leading performer among the city states and Union Territories.
For Odisha, the latest ranking reinforces its position as a key investment destination. However, experts believe sustained reforms, faster project implementation and stronger industrial execution will be crucial for translating policy readiness into higher investment inflows, employment generation and long-term economic growth.
