Andhra Pradesh, Telangana Dethrone Gujarat To Rank #1 In Ease Of Doing Business In India

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Andhra Pradesh and newly formed state Telangana are fast becoming the most preferred destination for starting a new business, thanks to speedy reforms and precise allocation of funds to boost entrepreneurship.

In the latest ‘Ease of Doing Business’ ranking by DIPP (Department of Industrial Policy and Promotion) and World Bank, Andhra Pradesh and Telangana, both have scored highest 98.78% marks to rank #1 and #2 in the ranking across 340 parameters.

PM Modi’s home state Gujarat, which was ranked #1 last year, has thereby slipped to #3 position this year.

But there is a reason for BJP to cheer as out of top 10 states ranked in this list, 8 states are being governed by BJP led National Democratic Alliance. These rankings have been finalized based on the performance by each state in implementing DIPP’s 340-point ‘Business Reform Action Plan’.

Interestingly, Maharashtra’s ranking dropped by 2 spots to reach #10 whereas Arvind Kejriwal led Delhi slipped to 19th rank, thereby losing 4 spots.

The 6 key areas where DIPP monitored the rankings are: single-window systems, tax reforms, construction permits, environment and labour reforms, inspection reforms, and commercial disputes and paper-less courts.

Indian States Implement Massive Business Reforms This Year

Overall, the reforms implemented by various states have been remarkable to say the least.

If last year only 7 states implemented more than 50% of the reforms as outlined in the ‘Business Reform Action Plan’ by DIPP, this year 17 states have implemented more than 50% reforms from the 340 pointers.

Besides, 16 states have actually implemented more than 75% of the reforms; and last year, none of the states had this distinction.

The top 10 rankings are:

  1. Andhra Pradesh (99.78%)
  2. Telangana (99.78%)
  3. Gujarat (98.21%)
  4. Chhattisgarh (97.32%)
  5. Madhya Pradesh (97.01%)
  6. Haryana (96.95%)
  7. Jharkhand (96.57%)
  8. Rajasthan (96.43%)
  9. Uttarakhand (96.13%)
  10. Maharashtra (92.86)

Some other highlights from the ranking

– 12 Indian states implement 90-100% of reforms as outlined by DIPP

– 17 states and Union Territories including Goa, Kerala and most of the NE States have been described as ‘Laggard’ as they implemented only 0-40% of reforms

– National implementation average has been around 48%, which is higher than last year when the average was 32%

– Due to passage of Commercial Appellate Divisions Act in 2015, there was a massive increase in implementing judicial reforms by various states.

– Due to GST Bill, states have made good progress in the implementing tax reforms such as mandating e-registration for value added tax, central sales tax, online payment of taxes and online tax return procedure

– All data pertaining to the rankings were picked directly from the Business Reform Action Plan portal, where real time data is being updated live.

– Overall, 32 Indian states and UTs have implemented 7124 business reforms for ‘Ease of Doing Business’ in India

Indian Govt. Unhappy With World Bank Over Country Wise Ranking

Meanwhile, on a global scale, India’s ‘Ease of Doing Business’ ranking increased by only 1 spot to reach 130th.

Indian Govt. has been unhappy with World Bank over their methodology to determine national rankings, and protest has already been lodged.

The reason is that, World Bank only considers business reforms implemented by New Delhi and Mumbai for finalizing the score, whereas Indian Govt. wants World Bank to consider other states as well so that the bigger picture is being viewed, rather than a small window to find out business environment in the country.

As per reports, World Bank’s India director Junaid Ahmad has requested World Bank chief economist Paul Romer reconsider the methodology used in determining the final score of India on the global level.

Do you think that the sudden rise of Andhra Pradesh and Telangana as the top states for doing business signifies a rather incredible change in the business environment? Absence of Karnataka and Tamil Nadu from the top 10 ranking means that IT and Digital sector is now moving away from Bengaluru and Chennai?

Do let us know by commenting right here!

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