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Methodology
Our purpose is to identify 5 leading states based on several relevant indicators that reflect
investment friendliness. We have captured the state’s position for individual variables as well
as collectively through constructing a composite index that accounts for all the variables. The
specific indicators that have been selected for the inaugural issue are:
1. Urbanization process
2. State income
3. Capital formation
4. Infrastructure availability related to power
5. Infrastructure availability related transportation
6. Telecom facilities
7. Health infrastructure
8. Educational infrastructure
9. Market size
To depict the position of each state regarding individual variable, we computed median value
for each of these variables. As the next step an index was formed taking the median value as
100 and the top 5 states have been identified based on the index value. To arrive at the final
composite index that includes all the variables, we assigned equal weight to each variable.
The composite value is the linear combination of each of these variables. After obtaining the
composite value, we computed the median. The final index was formed based on the
composite values considering the median value as 100.
Additionally, we have mapped the fastest growing districts, in terms of GDP growth over 5
years to identify the emerging pockets of interest for investors.
As clearly suggested by the graph below, Maharashtra emerges as the best possible state for
investment purpose. The investment friendliness of the rest of the four states are almost equi-
level. However, a few other states with closer final composite index value are Karnataka, West
Bengal and Uttar Pradesh.
350
Top 5 States of India for Investment Purpose 324
Composite Index 300
250 207
186 190 191
200
150
100
50
0
Delhi Andhra Tamil Nadu Gujarat Maharashtra
Pradesh
Urbanization process
Maharashtra 1
2288
2000
Uttar Pradesh 2
Tamil Nadu 3 1500
Index value
Andhra 572
666
5 500 462
0
Andhra West Tamil Uttar Maharashtra Other
Pradesh Bengal Nadu Pradesh states
States Rank
Maharashtra 1
Uttar
2
Pradesh Share of Top 5 States in Total Urban Population
Tamil Nadu 3
West Bengal 4
Andhra Pradesh
7% West Bengal
Andhra 7%
5 Tamil Nadu
Uttar Pradesh
12%
Maharashtra
14%
400
374
Mizoram 1 350
300
Maharashtra 2 250
Growth Index
215
3
204
Goa
198
200
177
150
Delhi 5 50
0
Maharashtra Tamil Nadu Mizoram Goa Delhi India
States
State income
Gross State Domestic Product (GSDP) (1st table and figure)
Being the financial and commercial hub of the country, Maharashtra is well ahead of other
states. Apart from the 5 top ranking ones, Tamil Nadu and Karnataka can also be considered
in the same league.
State’s share in India’s Gross Domestic Product (2nd table and figure)
The top 5 states account for 40% of the total GDP of the country. However, concentration of
major economic activities in a few states is established further with the fact that the next 5
states contribute 37% to country’s GDP while the balance 18 states account for 23%.
Average annual growth over last 5 years (3rd table and figure)
The smaller states show faster growth in terms of state income mainly due to their small base
of GSDP. Haryana is the only exception, which has been witnessing fast pace of expansion in
economic activities, especially in cities adjacent to Delhi such as Gurgaon, Faridabad etc.
3000
2523
2500
2000
Index value
1500
1000
514
500
291 333
270 278
0
Gujarat West Bengal Andhra Pradesh Uttar Pradesh Maharashtra Other states
State
States Rank
Maharashtra 1 Top 5 State‐ Share in Country's GDP
Andhra Pradesh 3
West Bengal 4
Gujarat 5
tes
Maharashtra
12%
States Rank Top 5 States - Average Annual Growth for Last 5 Years
200
190
Manipur 1 180
160
160
Jharkhand 2 140
122
125
120
120 115
Index Value
Haryana 3 100
80
Nagaland 4 60
40
Uttaranchal 5 20
0
Uttaranchal Nagaland Haryana Jharkhand Manipur All-India
States
Capital formation
States 1600
1459
Maharashtra 1 1400
1200
Tamil Nadu 2
1000
Gujarat 3
Index Value
800
628
Karnataka 4 600
452
393
5
400
200
0
Uttar Pradesh Karnataka Gujarat Tamil Nadu Maharashtra Other states
State
States Rank Top 5 States ‐ Share of India's Total Gross FIxed Capital Formation
Maharashtra 1
Tamil Nadu
Maharashtra 13%
18%
Karnataka 4
Uttar Pradesh 5
3000
States Rank
2500 2428
1
Maharashtra
2000
Index Value
1500
2
Tamil Nadu
1000 887
751
561 578
500
363
3
Gujarat 0
Karnataka Andhra Pradesh Gujarat Tamil Nadu Maharashtra other states
State
Andhra 4
Pradesh
5
Karnataka Top 5 State - Contribution to Country's Total Connected Load for Industrial Use
States Rank
1
Maharashtra
Andhra Pradesh
Karnataka 10%
2 7%
Tamil Nadu
other states Gujarat
44% 10%
Tamil Nadu
Maharashtra 13%
16%
3
Gujarat
Andhra 4
Pradesh
5
Karnataka
4000
Maharashtra 1 3670
3500
Gujarat 2 3000
Karnataka 3 2500
Index Value
2000
Andhra
4
Pradesh 1500 1383
954
1000 887
500
0
West Bengal Andhra Pradesh Karnataka Gujarat Maharashtra Other States
States
Top 5 States - Consumers of Industrial Usage of Power
States Rank
1
Maharashtra
2
Gujarat Andhra Pradesh
West Bengal 8%
8%
5
West Bengal
1
1600
Delhi 1400
1200
Index value
2 1000
600
498
3 400 331
385
Punjab 200
232
270
0
Gujarat Tamil Nadu Andhra Pradesh Uttar Pradesh Maharashtra Other states
4 States
Haryana
5
Bihar
Top 5 States - Share in Countries Total Projected Expenditure on Roads and Bridges
States Rank
1
Delhi
Tamil Nadu
8%
Gujarat
2 6% Andhra Pradesh
11%
Maharashtra
14%
3
Punjab
4
Haryana
5
Bihar
States 2500
Uttar 1 2000
2069
Pradesh
1500
2
Index Value
Rajasthan
1000
3
Maharashtra 535
500
331 346 366
326
4
Gujarat 0
Andhra Pradesh Gujarat Maharashtra Rajasthan Uttar Pradesh Other states
State
Andhra 5
pradesh
Rank
States
Uttar 1
Pradesh
2
Rajasthan
Top 5 States - Railway Route Length
3
Maharashtra 2500
2069
4 2000
Gujarat
Andhra
1500
Index Value
pradesh
1000
535
500
331 346 366
326
0
Andhra Pradesh Gujarat Maharashtra Rajasthan Uttar Pradesh Other states
State
States
Uttar 1
Pradesh
Andhra Pradesh
Gujarat
8%
8% Maharashtra
2 Other states
9%
3
Maharashtra
4
Gujarat
Andhra 5
pradesh
Telecom facilities
States
70
65.4
61.08
60
56.73
1 50
Punjab
40
Teledensity
33.7
2 30 27.61
Kerala
25.54
20 18.78
16.98 17.06
Himachal
12.74
3 10
Pradesh 0
Gujarat Karnataka Himachal Kerala Punjab Kolkata Mumbai Chennai Delhi India
Pradesh
States
4
Karnataka
5
Gujarat
Internet 3500
States Domains 3258
3000
1
Delhi 2500
2 2000
Index Value
Maharashtra
1500
1253
3
Karnataka
1000
495
413
Andhra
500 405
332
4
Pradesh 0
Kerala Andhra Pradesh Karnataka Maharashtra Delhi Other states
State
5
Kerala
Top 5 States - Registered Internet Domains
Andhra Pradesh
7%
Kerala Karnataka
5% 7%
Maharashtra
Other states 8%
53%
Delhi
20%
Health infrastructure
Public Health Centres (PHC) and Community Health Centres (CHC) Per Million
Population(1st table and figure)
In the hill districts the density of PHCs and CHCs are much higher than the states of the
plains. Rugged terrain and inaccessibility has prompted the Government to establish the basic
health facilities to these areas.
Government hospitals per million population (2nd table and figure)
Apart from the hill states, Delhi and Goa figure amongst the top 5 states in terms of density of
Government hospitals. Delhi has the advantage of being the capital of the country while the
proactive role of the state government surely been the case of Goa.
Number of available beds in government hospitals per Million population (3rd table and figure)
Gujarat and Orissa are the inclusions amongst top 5 states from the plain region.
States Rank
Uttaranchal 1
Arunachal
2
Pradesh
Himachal
3
Pradesh
Mizorm 4
Meghalaya 5
Top 5 States- Number of PHCs and CHCs Per lakh Population
2,000
1,800 1,739
1,600
1,400
1,200
Index Value
1,000
800
600
399
400 324
278
210
200
95
-
Meghalaya Mizoram Himachal Pradesh Arunachal Pradesh Uttaranchal All India
State
States Rank
Sikkim 1
Arunachal 2
Goa 3
Delhi 4
Nagaland 5
450
397
400
350
300
264
255
Index Value
250
196 196
200
150
100 92
50
0
Nagaland Delhi Goa Arunachal Pradesh Sikkim India
State
States Rank
Nagaland 1
Arunachal
2
Pradesh
Sikkim 3
Orissa 4
Gujarat 5
699
700
610 619
600
500 483
Index Value
400
341
300
200
139
100
0
Gujarat Orissa Sikkim Arunachal Pradesh Nagaland India
State
Educational Infrastructure
States Rank
Kerala 1
Delhi 2
Tamil nadu 3
Himachal
4
Pradesh
karnataka 5
Top 5 States- Education Development Index
130
126
125
124
121
120
Index Value
116
115
111
110
105
100
Karnataka Himachal Pradesh Tamil Nadu Delhi Kerala
State
States Rank
Kerala 1
Mizoram 2
Goa 3
Delhi 4
Himachal
5
Pradesh
Top 5 States - Literacy Rate
160
145 147
140
125 127
120
113
102
100
Index Value
80
60
40
20
0
Himachal Pradesh Delhi Goa Mizoram Kerala All India
State
Market
States Rank
Maharashtra 1
West Bengal 2
Uttar
3
Pradesh
Kerala 4
Gujarat 5
Top 5 States - Potential Market for Consumer Durables
2500
1978
2000
1500
Index Value
1000
685
500
356 363
310 313
0
Gujarat Kerala Uttar Pradesh West Bengal Maharashtra Other States
State
States Rank
Maharashtra 1
West Bengal 2
Uttar
3
Pradesh
Kerala 4
Gujarat 5
Top 5 States - Market Share for Consumer Durables
Kerala
Gujarat 8%
8% Uttar Pradesh Gujarat
9%
Other States Kerala
49%
Uttar Pradesh
Maharashtra West Bengal
17%
Maharashtra
West Bengal Other States
9%
States Rank
Maharashtra 1
West Bengal 2
Uttar
3
Pradesh
Andhra
4
Pradesh
Gujarat 5
Top 5 States - Total Market Size
600
543 543
500
400
Index Value
294
300 284
263 270
200
100
-
Gujarat Andhra Pradesh Uttar Pradesh West Bengal Maharashtra Other states
States
States Rank
Maharashtra 1
West Bengal 2
Uttar
3
Pradesh
Andhra
4
Pradesh
Gujarat 5
Top 5 States - Share in India's Total Market Size
Gujarat
Other states 12%
25% Andhra Pradesh
12%
Uttar Pradesh
Maharashtra 13%
25% West Bengal
13%