Investors' guide to the states of India Investment Skyline of India is a guideline to the investors for identifying the best states in the country for investment purpose. We plan to take 8-10 broad parameters every quarter and identify the best states for investment in terms of those parameters. The first issue looks at selected demographic, infrastructure and market related parameters and identifies the 5 top states in the country for investments, for each of the parameters. 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. The Top 5 States in India Based on Final Composite Index 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. Urbanization process Urban population (1st table and figure) In terms of the size of urban population in the state, Maharashtra is the top ranking states. However, as per expectation, the bigger states find their place in the top 5 ranks in terms of this indicator. State’s share to India’s total urban population (2nd table and figure) Contribution of these 5 top ranking states is exactly half of India’s total urban population. This clearly suggests that the metro cities, namely, Mumbai, Chennai, Kolkata and Hyderabad play a major role in shaping India’s urban population concentration. Urban growth (3rd table and figure) It is important to notice that Goa and Mizoram, two smaller states of the country, figure among the top 5 states in terms of urban growth. Along with a faster penetration of urbanisation, smaller urban base in these state is a major force behind this pattern. 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 f

1. Investment Skyline of India
Investors' guide to the states of India
Indicus Analytics
Mumbai 24 August, 2009
Investment Skyline of India is a guideline to the investors for identifying the best states in the
country for investment purpose. We plan to take 8-10 broad parameters every quarter and
identify the best states for investment in terms of those parameters. The first issue looks at
selected demographic, infrastructure and market related parameters and identifies the 5 top
states in the country for investments, for each of the parameters.
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.
The Top 5 States in India Based on Final Composite Index
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.

2. 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
Urban population (1st table and figure)
In terms of the size of urban population in the state, Maharashtra is the top ranking states.
However, as per expectation, the bigger states find their place in the top 5 ranks in terms of
this indicator.
State’s share to India’s total urban population (2nd table and figure)
Contribution of these 5 top ranking states is exactly half of India’s total urban population. This
clearly suggests that the metro cities, namely, Mumbai, Chennai, Kolkata and Hyderabad play
a major role in shaping India’s urban population concentration.
Urban growth (3rd table and figure)
It is important to notice that Goa and Mizoram, two smaller states of the country, figure among
the top 5 states in terms of urban growth. Along with a faster penetration of urbanisation,
smaller urban base in these state is a major force behind this pattern.
State Rank 2500
Top 5 States ‐ Urban Population
Maharashtra 1
2288
2000
Uttar Pradesh 2
Tamil Nadu 3 1500
Index value
West Bengal 4 1000
Andhra 572
666
5 500 462
Pradesh 318 348
0
Andhra West Tamil Uttar Maharashtra Other
Pradesh Bengal Nadu Pradesh states
States Rank
Maharashtra 1

3. 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
Pradesh Other states
50%
10%
Uttar Pradesh
12%
Maharashtra
14%
States Rank Top 5 States - Urban growth
400
374
Mizoram 1 350
300
Maharashtra 2 250
Growth Index
215
3
204
Goa
198
200
177
150
Tamil Nadu 4 100
115
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.
States Rank Andhra Pradesh 3
Maharashtra 1 West Bengal 4
Uttar Pradesh 2 Gujarat 5

4. Top 5 States- Gross State Domestic Products
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
Uttar Pradesh 2 Gujarat
6% West
7
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
Gross Fixed Capital Formation (GFCF) (1st table and figure)
The developed states in terms of industrial activities have figured in the top ranking states. It is
important to mention that Andhra Pradesh, Chhattisgarh and Haryana are close competitors to
Uttar Pradesh. West Bengal, one of the important relatively industrialised states in the country,
ranks 11.
State’s contribution to India’s total capital formation (2nd table and figure)
The top 5 states contribute as high as 57% to India’s total capital formation. The share of top
10 states is 80% of the country’s GFCF.

5. Rank Top 5 State - Gross Fixed 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
Uttar Pradesh 235
278
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 2 Karnataka
8%
Uttar Pradesh
7%
Other states Gujarat
Gujarat 3 42% 12%
Tamil Nadu
Maharashtra 13%
18%
Karnataka 4
Uttar Pradesh 5
Infrastructure availability related to power
Connected load for industrial usage (1st table and figure)
The most industrialized states of the country figure in the top 5 in terms of power consumption
for industrial usage. Punjab, Rajasthan and Uttar Pradesh are close followers to these 5
states.
Share in India’s total load for industrial usage ((2nd table and figure)
56% of the total connected load for industrial usage comes from these top 5 states.
Number of consumers for industrial usage (3rd table and figure)
In terms of number of consumers, West Bengal is an inclusion in the list. This might be due to
the fact that small scale industries are quite prevalent in the state.
Share in country’s total consumer for industrial usage (4th table and figure)
Maharashtra itself accounts for 17% of the total consumers for industrial usage. However, an
increase in share compared to previous indicator in case of Maharashtra as well as Gujarat in
the total pie reflects a mix of both large as well as smaller industrial units in these states.

6. Top 5 States - Connected Load For Industrial Use
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
States Rank Top 5 States - Consumers of Industrial Usage of Power
4000
Maharashtra 1 3670
3500
Gujarat 2 3000
Karnataka 3 2500
Index Value
2000
Andhra
4
Pradesh 1500 1383
954
1000 887
West Bengal 5 645 699
500
0
West Bengal Andhra Pradesh Karnataka Gujarat Maharashtra Other States
States

7. Top 5 States - Consumers of Industrial Usage of Power
States Rank
1
Maharashtra
2
Gujarat Andhra Pradesh
West Bengal 8%
8%
3 Other States Karnataka
Karnataka 44% 11%
Gujarat
Maharashtra 12%
Andhra 17%
4
Pradesh
5
West Bengal
Infrastructure availability related to transportation
Projected expenditure on roads and bridges – 2005–10 (1st table and figure)
Maharashtra again shows its prominence as India’s most favoured investment destination. However,
the pattern also suggests a better and developed road network in the western and southern part of the
country.
Share of total projected expenditure on roads and bridges (2nd table and figure)
These 5 states share almost 50% of the total projected expenditure on roads and bridges of the
country. For obvious reason these listed stated have a fast mover advantage over others.
Rail density (3rd table and figure)
States located between important destinations show higher rail densities. However, it is important to
mention here that almost all the hill states of the country do not have any significant railways network.
Total railway route length (4th table and figure)
In terms of total route length, as expected the bigger states in terms of area have figured as the top 5
raking ones. However, Madhya Pradesh, West Bengal and Tamil Nadu are close to the leading group.
Share in India’s total railway route length (5th table and figure)
These 5 states share 47% of the total railway route length of the country. However, as mentioned
earlier, exclusion of all the hill states due to non-availability of railway coverage is an important reason
for the large share in favour of these 5 top ranking states.

8. Top 5 States - Projected Expenditure on Roads and Bridges 2005-10
States Rank 2000
1833
1800
1
1600
Delhi 1400
1200
Index value
2 1000
West Bengal 800
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
West Bengal Other states
52%
Uttar Pradesh
9%
11%
Maharashtra
14%
3
Punjab
4
Haryana
5
Bihar
Rank Top 5 States - Railway Route Length
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

9. Top 5 States - Railway Route Length
3
Maharashtra 2500
2069
4 2000
Gujarat
Andhra
1500
5
Index Value
pradesh
1000
535
500
331 346 366
326
0
Andhra Pradesh Gujarat Maharashtra Rajasthan Uttar Pradesh Other states
State
Rank Top 5 States -Share In Country's Total Railway Route Length
States
Uttar 1
Pradesh
Andhra Pradesh
Gujarat
8%
8% Maharashtra
2 Other states
9%
Rajasthan 52% Rajasthan
9%
Uttar Pradesh
14%
3
Maharashtra
4
Gujarat
Andhra 5
pradesh
Telecom facilities
Teledensity (1st table and figure)
The reason for showing major metro cities along with top 5 states is exclusion of these cities
from their respective states and inclusion of one state into another in case of a few big states
in the available data. However, it suggests that the states to which these cities belong, would
have much higher Teledensity if these cities were included.
Internet usage- Number of registered domain (2nd table and figure)
Delhi is undoubtedly the leader as far as registered domains are concerned. However, West
Bengal and Tamil Nadu are also high in domain registration since the index values are close
to some of the top 5 states. The share of Delhi in domain registration is as high as 20%.

10. Rank Top 5 States and 4 Metro Cities - Teledensity
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
Registered Top 5 States - Registered Internet Domains
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

11. 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

12. 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

13. States Rank
Sikkim 1
Arunachal 2
Goa 3
Delhi 4
Nagaland 5
Top 5 States - Government Hospitals PerMillion Population
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

14. States Rank
Nagaland 1
Arunachal
2
Pradesh
Sikkim 3
Orissa 4
Gujarat 5
Top 5 States - Government Hospital Beds Per Million Population
800
699
700
610 619
600
500 483
Index Value
400
341
300
200
139
100
0
Gujarat Orissa Sikkim Arunachal Pradesh Nagaland India
State

15. Educational Infrastructure
Education Development Index (1st table and figure)
Kerala emerges as the top ranking state in terms of education development index. Though
none of the north-eastern states have figured in the top 5, all of them show high education
development index.
Literacy ( 2nd table and figure)
The trend from literacy distribution is very similar to that of education development index.
Apart from the top 5 states, all the north-eastern states show high literacy level. However,
amongst the developed states, Maharashtra, Tamil Nadu and Punjab have higher literacy
rates compared to the rest.
States Rank
Kerala 1
Delhi 2
Tamil nadu 3
Himachal
4
Pradesh
karnataka 5

16. 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

17. 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

18. Market
Potential market size (3rdnd table and 3rd figure)
The bigger states have figured in the list of top 5 states. However, Tamil Nadu and Karnataka
are not far behind.
Share in total potential market size (4th table and 4th figure)
These 5 states contribute to about 75% of the total potential market size of the country.
Maharashtra itself has a share of 25%. The potential market size of the bottom 15 states is
about only 8% of the total.
Potential market size for consumer durables (1st table and 1st figure)
Similar to the trend observed in case of total market size, the bigger states figure in top 5 list.
The exception is Kerala, perhaps on account of remittance the state receives from overseas.
The top 5 states account for about 50% of the potential consumer durables market of India.
The bottom 10 states account only for about 10% of the consumer durables market.
States Rank
Maharashtra 1
West Bengal 2
Uttar
3
Pradesh
Kerala 4
Gujarat 5

19. 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

20. 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

21. 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

22. 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%