Gujarat has topped a list of 21 states with the most investment potential, said an economic think tank report. Delhi, Tamil Nadu, Andhra Pradesh and Maharashtra were others on the top five.
The National Council of Applied Economic Research (NCAER) report cited corruption, delay in getting approvals before starting a business and hurdles in getting environment clearance as the top three constraints for investments.
The rankings of 20 states and one Union territory, Delhi, was based on five pillars - labour, infrastructure, economic climate, governance and political stability, perceptions - and 51 sub-indicators.
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While Gujarat topped in governance and political stability and perception, Delhi ranked first in infrastructure and economic climate. Kerala topped the chart in labour issues.
The report said out of the 21 states, Bihar, Uttar Pradesh and Jharkhand have a significant amount of catching up to do.
NCAER's Senior Fellow Indira Iyer said this report was different from the World Bank's report, released last year, though it complements that ranking.
While the World Bank-DIPP report was more about procedures and transactions, the NCAER report focuses on policy and structural issues that determines the business environment in a state.
Talking about the NCAER index, DIPP Secretary Ramesh Abhishek said the results were quite different from the World Bank report.
"In the beginning it was of some concern to us before we got down to the details of what this study is all about, because we thought it may send some diverse messages to various potential investors. But the two studies and the contents are so different that they supplement each other nicely," he said.
Talking about specifics, he said the report had cited corruption, delay in getting approvals before starting a business and hurdles in getting environmental clearance as top three constraints. "These are the areas DIPP wishes to address as part of our ease of doing business initiatives," he added.
The secretary suggested the states come out with ideas and measures to improve on these three issues.
The survey had covered only 21 states. Assam was the only one among the seven Northeastern states. Goa, Jammu & Kashmir and Sikkim were not taken into account.
The objective of the survey was to get industry's perception on issues related to land, labour, infrastructure and governance, business climate in their respective states and various other challenges faced by the industrialist.
POTENTIAL STARS
TOP-5
- Gujarat
- Delhi
- Tamil Nadu
- Andhra Pradesh
- Maharashtra
- Himachal Pradesh
- Punjab
- Bihar
- Uttar Pradesh
- Jharkhand
