Gujarat ranked best state for business

New Delhi: Gujarat is the best Indian state to do business in, shows the World Bank's 'ease of doing business' ranking. The state, which has topped the list with a 71.14 per cent score, is followed by Andhra Pradesh (70.12 per cent), Jharkhand (63.09 per cent), Chhattisgarh (62.45 per cent) and Madhya Pradesh (62 per cent).

The World Bank report, Assessment of State Implementation of Business Reforms, was released in New Delhi on Monday, under the aegis of the Confederation of Indian Industry. This is the first time that the World Bank has created a sub-regional state-wide report card on the basis of a 98-point action plan for business reforms, drawn up by the Department of Industrial Policy & Promotion and state governments during a Make In India workshop in December last year.

The other states that figure among the top 10 are Rajasthan, Odisha, Maharashtra, Karnataka and Uttar Pradesh - in the same order.

Finance Minister Arun Jaitley said: "Mineral-producing states like Odisha, West Bengal, Jharkhand and Chhattisgarh have moved up the ranking as they have eased regulations on the ground."

The eight most important parameters on which states were evaluated were: Setting up a business, allotment of land and obtaining construction permit, complying with environment procedure, complying with labour regulations, obtaining infrastructure-related utilities, registering and complying with tax procedures, carrying out inspections and enforcing contracts. "Many reforms have been implemented only very recently - between March and June 2015 - so the private sector might not be aware of those. We urge states to undertake a detailed communication campaign to ensure businesses are aware of the improvement in the regulatory environment," the World Bank said in the report.

According to the report, Punjab is the best state in terms of 'setting up a business'. The state, which has a single-window online system for registrations and licences, has scored 81.48 per cent on this parameter.

In 'obtaining infrastructure-related utilities', Maharashtra, Gujarat and Madhya Pradesh - with their clearly defined timelines for electricity, water and sewage connections, and a reformed electricity connection application process - were the best-ranked states.

The World Bank lauded setting up of the 'Punjab Bureau of Investment Promotion' as a one-stop shop for various state-level regulatory and fiscal incentive approvals. The bureau is headed by a chief executive with the power to grant approvals.

In terms of 'obtaining land and construction permits', Madhya Pradesh topped the list with a 72.73 per cent score. It was followed by Gujarat and Maharashtra. The report noted how these states published details on land banks available, with detailed allotment procedures. Gujarat has also implemented a robust geo-spatial information system (GIS) providing details of land earmarked for industrial use.

In Rajasthan, no separate permission is required for construction in Riico industrial area (the Rajasthan State Industrial Development and Investment Corporation) for plots sized 40,000 sq metres.

Onno Ruhl, the World Bank's country director for India, said: "The World Bank stands ready to assist state governments in this important agenda. What this report does very well is that it provides a road map for states serious about improving their business environment and creating jobs. This has an inclusive objective, as it is the small and medium enterprises that will gain the most from these reforms."

Gujarat scored 100 per cent in terms of 'obtaining environment clearances'. The Gujarat Pollution Control Board (GPCB) adopted a web-based application, eXtended Green Node (XGN), to provide an information technology solution for effective implementation of various pollution clearances/procedures. Jharkhand stood first in 'complying with labour laws'. The state was followed by Gujarat and Chhattisgarh.

"However, the report also flags a multitude of reforms that still need to be implemented effectively by most states. A majority of states are yet to begin implementing electronic courts to resolve commercial disputes; that is, infrastructure to allow e-filing of disputes, issuance of e-summons, online payments, e-cause lists and digitally signed court orders," a commerce & industry ministry release said on Monday.

The report also said 26 states were yet to introduce reforms along a wide range of labour inspections under various acts, or on inspections related to building permits. About 25 states lacked online availability of information on land banks, and use of GIS to track industrial land parcels.

Maharashtra topped in 'obtaining infrastructure-related utilities'. According to the report, the state offers investor-friendly services for obtaining infrastructure-related utilities like electricity, water and sewage, in a time-bound manner.

Earlier, India had ranked 142nd among 189 economies in the World Bank's 'Doing Business' 2015 report. It was the second-worst-performing economy in South Asia. After that, Prime Minister Narendra Modi had urged World Bank President Jim Yong Kim to assist India in bringing out a state-wise report card. The World Economic Forum's Global Competitiveness Report had ranked India 71st among 144 economies sampled.

Besides, the country is ranked 93rd in irregular payments and bribes, 59th in burden of government regulation, and 57th in the efficiency of legal framework in settling disputes.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.