NITI Aayog Index flags Telangana’s slide, but endorses BRS-era TS-iPASS model

NITI Aayog's first Investment Friendliness Index ranks Telangana 13th despite recognising TS-iPASS as a national best practice in industrial approvals. The report highlights the State's strong regulatory framework but shows it trailing several major States in overall investment competitiveness

Hyderabad: The first Investment Friendliness Index released by NITI Aayog has presented a paradox for Telangana.

While the report identifies the State’s TS-iPASS as a national best practice in industrial approvals, Telangana’s overall ranking has slipped to 13th place, a marked departure from the leadership position it consistently enjoyed in investment and ease-of-doing-business rankings during the previous BRS government.

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With an overall score of 47.3, Telangana has been placed in the “Frontrunner” category. However, it now trails Gujarat, Maharashtra, Tamil Nadu, Karnataka and Andhra Pradesh, indicating a decline in its relative competitiveness in attracting investments since the Congress assumed office.

The report’s most significant endorsement was reserved for TS-iPASS (Telangana State Industrial Project Approval and Self-Certification System), introduced by the K Chandrashekhar Rao government. “Telangana demonstrates strong performance in the business climate and regulatory ease pillars. A key driver of the high score in the regulatory ease pillar is the TS-iPASS,” the report said.

According to the report, the TS-iPASS was widely regarded as one of India’s most efficient single-window mechanisms, offering fully online, time-bound approvals with automatic clearances, making it exceptionally easy for investors and industries to operate in the State. The recognition has only reinforced Telangana’s reputation, built during the BRS regime, as one of India’s most investor-friendly destinations.

National rankings during the BRS rule consistently reflected the State’s strong investment climate. Telangana emerged as a joint topper with Andhra Pradesh in the 2015-16 Business Reform Action Plan (BRAP) rankings and continued in the “Top Achievers” category in the 2020 assessment with a score of about 94.86 per cent, reflecting the sustained implementation of investor-friendly reforms.

In NITI Aayog’s Export Preparedness Index 2021, Telangana secured the best Business Environment score in the country with a perfect 100, ahead of Andhra Pradesh and Gujarat, while ranking 10th overall and fifth among landlocked States. The report attributed the performance to a favourable business ecosystem and a robust ease-of-doing-business framework.

Even NITI Aayog’s Fiscal Health Index for FY 2023-24, released this year but reflecting the policy framework largely shaped under the BRS government, ranked Telangana seventh nationally in the “Frontrunner” category. The assessment highlighted the State’s sharp increase in developmental capital expenditure and its infrastructure-led investment strategy during the previous regime.

Against that backdrop, Telangana’s position in the latest Investment Friendliness Index assumes political significance.

The report itself does not attribute the State’s lower ranking to any specific government or policy. Nevertheless, the findings indicate that Telangana has ceded ground to competing States since the change in government. The report evaluated States across multiple parameters, including governance, infrastructure, land, investor facilitation and regulatory systems.