Prime Minister Narendra Modi on Thursday said the competition among states to offer discounts and concessions to industrialists hasn’t benefitted either the states or the industrialists.

Several state governments have been offering sops, including tax rebates and breaks, to industrialists for setting up manufacturing units.

States were offering various discounts to attract investment and investors were waiting to see which state offered more concessions or discounts, Modi said at the global investors’ meet at Dharamshala, Himachal Pradesh.

This comes against the backdrop of the National Democratic Alliance (NDA) government setting up an ambitious goal of becoming a $5-trillion economy by 2024-25.

“The target of making India a 5-trillion dollar economy is not just the responsibility of the Union government. It will happen with the help of all states. There is a lot of potential in all states. When potential meets policy, it will lead to improved performance," said Modi. “The performance of districts, states, and the Centre has to work together. It is a collective responsibility and not individual effort," he said. It is essential to have an enabling ecosystem for investors in the states, free of the inspector raj and the need of permits, Modi said.

This comes at a time when the domestic economy is battling a severe demand slowdown, growing at its slowest pace in six years during the June quarter at 5%. The output of eight core infrastructure industries, which account for two-fifths of India’s industrial production contracted by 5.2% in September, against the 4.3% growth in the year-ago period.

Several reforms, such as ease of doing business, scrapping of obsolete laws, and a robust Insolvency and Bankruptcy Code, were undertaken by the NDA government, Modi said.

“This is not just an improvement in rankings but a major revolution in the way of doing business in India. In today’s global scenario, India is standing strong as we did not allow our economic fundamentals to become weak," he said. He also spoke about the Union cabinet’s decision on Wednesday to set up a 25,000 crore alternative investment fund to revive stalled housing projects.