Telangana, Andhra top ease of doing biz rankings, Gujarat slides to 3rd spot

Second edition of the government's annual ranking shows Gujarat, Chhatisgarh, MP in top 5

Andhra Pradesh and Telangana have emerged as the top states in the annual “ease of doing business” rankings, toppling Gujarat to the third place. Both the states have been ranked first in implementing business reforms, the commerce and industry ministry announced on Monday.

The second edition of the government’s ranking of states came a few days after India fared poorly, at 130 among 190 countries, in the World Bank’s ease of doing business rankings. However, the World Bank takes into account ease of doing business climate in Delhi and Mumbai only.

Chhattisgarh and Madhya Pradesh were also among the top five in the state-wise rankings. Haryana, Jharkhand, Rajasthan, Uttarakhand and Maharashtra, in that order, were the remaining states in the top ten. Last year, Gujarat had featured at the top, with Andhra Pradesh grabbing the second position and Jharkhand came third.

The State Implementation of Business Reforms, 2016, based on the ranking by Department of Industrial Policy and Promotion (DIPP), tracks implementation of reforms by state governments.    

Originally conceived under the Make in India campaign, it was a 98-point plan prepared in December 2014. A wider plan was released in September 2015, covering 340 points.

The plan includes reforms around 58 regulatory processes, policies, practices or procedures spread across 10 areas such as access to information, transparency enablers and land availability.

The states had submitted evidence of implementation of 7,124 reforms. These submissions were reviewed by the World Bank team and validated by DIPP to study whether they met the objectives of the plan. A total of 6,069 reforms were approved as having been implemented, a release by DIPP said.

The exercise is aimed at promoting competition among the states to improve business climate and attract investment. "While last year only 7 states implemented more than 50% of the reforms, this time 18 states have implemented more than that level," said Nirmala Sitharaman, commerce and industry minister.

States traditionally weak in this regard such as Arunachal Pradesh, Jammu and Kashmir and those in the North East have scores between 0 and 1 on a scale of 100. A detailed report is expected in November.

In the World Bank's Doing Business report released last week, India's place remained unchanged from last year's 130 among the 190 economies that were assessed on various parameters. But the last year's ranking was revised to 131, from which the country has improved its place by one spot.