Southern States top ease of doing business rankings

The ease of doing business state rankings, jointly prepared by the World Bank and the Department of Industrial Policy and Promotion (DIPP, have placed Andhra Pradesh, Telangana and Karnataka among the Top Achievers. Tamil Nadu is among the Achievers, while Kerala is placed among the Aspirers. In the rankings Andhra Pradesh is at the top, followed by Telangana in the second and Haryana in the third.

The final rankings were arrived at after a combination of “reform evidence score” and “feedback score”. The highlights were the states of Jharkhand and Telangana who scored 100% in their reform evidence scores. Jharkhand, which is home to several steel plants, coal and iron ore mines, clocked 100% in the “reform evidence scorecard”.

The “reform evidence score” is allotted on the basis of 372 recommendations for reforms on regulatory processes, policies, practices and procedures spread across 12 reform areas. In this year’s edition of rankings, DIPP carried out a comprehensive business-to-government (B2G) feedback exercise, where feedback was taken from businesses on the quality of implementation of the reforms claimed by the states. Telangana dropped to the second spot after topping the rankings last year.

The idea behind ranking states is to induce competition to attract investment and improve the business climate. In addition, these rankings indicate that the states have the potential to attract business and undertake various reforms that are being undertaken by the Centre. In 2016, Telangana and Andhra Pradesh jointly emerged as number one states to do business, ahead of Gujarat that was number one in 2015.

Maharashtra, said to be India’s most industrialised state, ranked 13th with a reform evidence score of 97.29% and a “feedback score” of 50.29%. Despite being a major industrial hub, Tamil Nadu was placed 15th with a “reform evidence score” of 95.93% and a feedback score of 43.90%. Both the states were listed as achievers in the ranking.

The national capital Delhi’s score declined to 33.99%, from 47% in 2016 and it stood at the 23rd spot in this year’s rankings. Northeastern states, except Assam, continue to remain at the bottom, underlining the need for strategic policy interventions to turn these states into business-friendly destinations. The Parameters on which the states and UTs were ranked included reforms they have undertaken and the feedback from the government about the measures they have incorporated in their policies. The list categorised India’s 34 states and UTs into 4 categories - ‘Top achievers’, with a score of over 95% (9 states), ‘achievers’ with a score between 90-95% (6 states), ‘fast movers’ which had scored between 80-90% ( 3 states ), and those with a score below 80% in the ‘aspirers’ category (18 states and UTs).

The move is aimed at triggering competition among states to attract investments and improve business climate. The ministry will release of ranking of states and UTs under the business reform action plan 2017, an official said.

State governments are taking several steps such as setting up of single window system for approvals to improve ease of doing business. In the last Budget, the government had identified 372 action points for states which they would carry out in a mission mode.

In the latest Doing Business report of the World Bank, India’s rank improved by a number of notches to 100 among 190 nations. The government wants to be among top 50 countries in the overall ease of doing business rankings released by the World Bank.