Maharashtra tops ASI competitiveness index of Indian states

02 September 2016

Maharashtra has emerged as the most economically competitive Indian state in 2016 among 35 Indian states and union territories, in a study by the Asia Competitiveness Institute (ACI) of the Lee Kuan Yew School of Public Policy in Singapore.

Maharashtra, Delhi and Tamil Nadu broadly held the top positions relative to 32 other states and union territories, as they did in the 2015 and 2014 ACI reports.

The competitiveness ranking is based on the four criteria of macroeconomic stability, government and institutional setting, financial, business and manpower conditions, and quality of life and infrastructure development.

No position was allocated to Telangana as the ACI used 2013 data for the study, which was the latest available on the chosen parameters.

Other states in the top 10 included Gujarat, Karnataka, Uttar Pradesh, Andhra Pradesh, West Bengal, and Kerala, with Haryana emerging as a surprise performer that improved its ranking from 14 in 2014 to 10 in 2016.

Uttar Pradesh managed to sustain its position within the top 10 states, which the researchers behind the study said it owed to better outcomes in the ''governments and institutional setting'' criterion.

The ACI, which is one of several centres within the Lee Kuan Yew School of Public Policy in the National University of Singapore, also ranked five sub-national regions of India, namely Western, Northern, Southern, Eastern and North Eastern, which were ranked as first, second, third, fourth and fifth respectively.

Discussing the results with select media the researchers said, ''India is one of the countries with the largest unfulfilled potential,'' even as they added that they recognised that a ranking exercise was ''nothing more than a beauty contest,'' and they provided policy suggestions through a simulation study showing the potential improvement that each state could achieve in its rank through certain policies.

Among those states identified where the potential for improvement remained untapped, the worst performers in the overall competitiveness ranking were Jharkhand, Chhattisgarh and Uttarakhand at ranks 35, 34 and 33 respectively, although the authors of the report noted that Uttarakhand's performance was impacted significantly by natural disasters such as the floods that ravaged that state in 2013.

The ACI piece works toward a goal similar to that of the World Bank's Ease of Doing Business study, in terms of ''focusing leaders' minds'' on desirable policy targets.

Professor Tan Kong Yam of ACI drew parallels between Indian Prime Minister Narenda Modi's plan for increasing competitive federalism and former Chinese President Deng Xiaopeng's 30-year province-led development plan for China.

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