State ranks 23rd nationally and fifth among northeastern and hilly states, with strong regulatory ease but gaps in business climate and infrastructure
Shillong, July 17: Meghalaya has been classified as an “Emerging Performer” in the inaugural Investment Friendliness Index (IFI) released by NITI Aayog, ranking 23rd among states and Union Territories and fifth among the northeastern and hilly states.
The state secured an overall score of 43, with the report highlighting its strengths in regulatory ease and institutional environment, while identifying the business climate and government policy as areas requiring further reforms.
From the Northeast, Assam and Tripura are frontrunners, Meghalaya and Nagaland are emerging performers, while Arunachal Pradesh, Manipur, Mizoram and Sikkim are aspiring states.
The Investment Friendliness Index is a new framework developed by NITI Aayog to assess how effectively states create an enabling environment for investment by evaluating policy, regulatory, institutional and infrastructure-related parameters.
According to the report, Meghalaya received high investor satisfaction scores for its single-window clearance system, environmental approvals, construction permits and utility connections, supported by the Meghalaya Industrial and Investment Promotion Policy 2024.
The state also performed well on institutional indicators, recording a relatively low crime rate and fewer economic offences than the national average. The report noted that the state’s average Air Quality Index of around 85 was better than the national urban average.
Among its infrastructure strengths, the report cited reliable power supply, good highway and railway connectivity, robust digital infrastructure, and transparent procedures for land allotment and construction approvals.
However, NITI Aayog said Meghalaya’s investment ecosystem continues to face structural challenges. The state’s gross domestic product grew at an average annual rate of about 3.6 per cent over the past five years, below the all-state average of 4.8 per cent.
The report also pointed to limited banking penetration, with 13 active commercial bank branches per lakh population, compared with the category average of 19. Exports remained modest, ranging between $9 million and $11 million annually between 2021 and 2024, largely driven by agricultural products, while foreign direct investment inflows remained negligible.
The absence of an international airport was also identified as a constraint for attracting larger investments.
NITI Aayog recommended improving internal road conditions, upgrading industrial park infrastructure, strengthening logistics and supply chains, making the single-window clearance mechanism more efficient, and reforming grievance redressal systems to enhance investor confidence.
The report said strengthening state-level investment ecosystems through better infrastructure, efficient regulation and predictable policies would be critical to attracting domestic and foreign investment and achieving India’s long-term economic growth goals under the Viksit Bharat @2047 vision.
Also Read: Local auctioneers urge Meghalaya CM to review RVSF, ATS eligibility norms
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