HYDERABAD: Telangana has ranked 13th among all states and Union Territories and 10th among 17 large states in the NITI Aayog’s Investment Friendliness Index, scoring 47.3 out of 100 and earning the ‘Frontrunner’ status.
The index, released on Friday, was developed following a direction from Prime Minister Narendra Modi at the ninth Governing Council meeting of NITI Aayog in July 2024 to prepare an investment-friendly charter. The Union Budget 2025-26 later announced the index to promote reforms and strengthen competitive and cooperative federalism. It assesses states across eight pillars: infrastructure, business climate, resources, government policy, regulatory ease, institutional environment, financial health and environmental resilience.
According to the report, Telangana performed strongly in the business climate and regulatory ease pillars. It credited the Telangana State Industrial Project Approval and Self-Certification System (TS-iPASS) for digitising and streamlining construction permits and providing time-bound approvals, making it easier for industries to establish operations.
The report, however, ranked Telangana last among large states in the institutional environment pillar, citing high crime rates, particularly economic offences and cybercrimes. It noted that economic offences stood at 75 cases per lakh population in 2022 against the national average of 16, while cybercrime cases were 43 per lakh population compared with the national average of five.
Among the state’s strengths, the report highlighted Hyderabad’s quality of life, affordability, education and healthcare facilities, and reliable power supply with minimal outages and load-shedding for industries.
The report also identified areas requiring improvement. It said Telangana could further reduce the cost and time required to set up and operate businesses. While the TS-bPASS system has simplified approvals for residential and small commercial projects, timelines and coordination among departments for large industrial and commercial projects need improvement.
It also noted that the automobile sector faces challenges because of high taxes and a complex Regional Transport Office (RTO) system. The report recommended improving accountability in issuing no-objection certificates (NOCs) and power connections, strengthening coordination among agencies, and providing greater support to first-time entrepreneurs and MSMEs in meeting documentation requirements.