As Indian voters becomes more outcome-focused (although there is still a lot of caste-consciousness), there is now an increasing opportunity for better-governed states to attract more investment, creating more jobs, thus enhancing re-election prospects.

I tried to look around for possible studies that may throw light on various aspects of investment friendliness, but couldn't find many. The few indicators I found through a quick search are listed below. I'd like to invite your expert input on any indicator that I've missed listing here, or any other related thoughts.

I also believe there is a commercial opportunity for a company that consolidates such information and provides it publicly to potential foreign (and domestic) investors. Such a company could gain considerable clout on the Indian landscape by compelling Indian state governments to improve their performance. I'm happy to get involved in such an opportunity since I'm now looking to return to India full time in the next year or so.

CREDIT WORTHINESS

S&P's credit rating agency rates each nation, India ranks fairly poorly in this regard:

S&P's rates states in some countries as well, for instance in Australia. It doesn't do that in India since Indian states don't directly borrow money from credit markets. It would be nice if some other agency worked out a broadly similar fiscal performance indicator for Indian states.

ECONOMIC FREEDOM

Bibek Debroy, Lavleesh Bhandari and Swami Aiyar have published a comparative economic freedom index in 2011. They consider a wide range of variables. This is perhaps the most authentic state-comparison to date in India. However, on matters of corruption and governance, there is significant opportunity to improve this index.

CORRUPTION

I contacted Transparency International India and was referred to this study. Its key findings are provided below. Unfortunately, this is not exactly what I had in mind. But such studies cost a lot of money. I'm not sure whether there is anyone willing to fund such studies.

DEMOCRATIC GOVERNANCE

I notice that an index of democratic governance is under preparation. Some data are available here. Don't know exactly how states fare on this.

LITERACY COMPARISON

Wikipedia has such a comparison.

INCOME COMPARISONS

Wikipedia provides the following data:

Others

Indian tourism rankings by state (PDF)

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