New Delhi: BJP-ruled Gujarat is the best place in the country to do business, says the World Bank's ranking on ease of doing business in states, a list that has the party-ruled states occupying four of the top five slots.
Andhra Pradesh, ruled by BJP-ally TDP, is the second best state, followed by Jharkhand, Chhattisgarh, Madhya Pradesh and Rajasthan - all having BJP governments.
These rankings were provided in the report titled 'Assessment of State Implementation of Business Reforms' which was prepared by World Bank in association with the Department of Industrial Policy and Promotion (DIPP), KPMG, CII and Ficci.
The exercise is aimed at promoting competition among states with a view to improve business climate to attract domestic as well as foreign investments. The move would also help in improving India's overall ranking in the global Doing Business Study. India has been placed at 142nd position among 182 nations.
Overall, World Bank said India is a difficult place to do business and concerted action and reforms are needed on several fronts to improve its ranking in the global 'Doing Business Index'.
"The assessment recognises the fact that most states have already embarked on ambitious reform programmes or expanded their ongoing reform efforts," Additional Secretary in DIPP, Shatrughna Singh said.
The ranking of 32 states and union territories was based on eight specified parameters which include setting up of business, allotment of land, labour reforms and procedure for environmental clearance.
The parameters also include infrastructure, procedure for registration for tax purposes and inspections for compliance of various norms.
At the bottom of the ladder in the index were Mizoram, Jammu and Kashmir, Meghalaya, Nagaland and Arunachal Pradesh. "What this report does very well is to provide a roadmap for states serious about improving their business environment and creating jobs," World Bank country director Onno Ruhl said.
Among major states, West Bengal occupied the 11th slot, Tamil Nadu (12th), Haryana (14th), Delhi (15th), Punjab (16th), Himachal Pradesh (17th), Kerala (18th), Goa (19th), Bihar (21st) and Assam (22nd).
Pitching for further ease of doing business, Ruhl said a disproportionately high regulatory burden is borne by businesses in India today.
Besides, DIPP Additional Secretary Shatrughna Singh said the preparation of this report is just a tiny part of the gigantic effort that "we need to make in unwinding a maze of procedures, rules, regulations and laws that we have put in place in India."
"... we need to vigorously pursue reforms in the future," he added. The assessment, the first-of-its-kind, has been conducted to take stock of reforms implemented by states in the period January 1 to June 30 based on the 98-point action plan for business reforms agreed between DIPP and the state and union territory governments on December 29, 2014.
According to the report, Andhra Pradesh, Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Odisha and Rajasthan have implemented over 50 per cent of the 98 point action plan business reforms studied in the assessment. No state has implemented 75 per cent or more of the proposed reforms, an official statement said.
The assessment has identified good practices on different parameters. For example, Punjab leads in the area of 'Setting up a Business', as it features an online single window system for registrations and licences that cover most of the regulatory services in the country. Maharashtra, followed by Gujarat and Madhya Pradesh, was ranked highest in 'Obtaining Infrastructure Related Utilities', with clearly defined timelines for electricity,
water and sewage connections.
Across the country, the report said, states have made good progress in general tax reforms like mandating e-registration for VAT and CST, allowing online payment and filing of returns for various state taxes, providing e-filing support through service centres and helplines.
The report, however, 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 such as
infrastructure to allow for e-filing of disputes, issuance of e-summons, online payments, e-cause lists and digitally signed court orders," it said.
Twenty six states are yet to introduce reforms along a wide range of labour inspections under various acts, or on inspections related to building permits. Commenting on the report, Rajasthan Chief Minister Vasundhara Raje said, "This is a defining moment for Rajasthan because improving our ease of doing business directly accelerates job creation for our youth."
The Rajasthan model of development, she said, aims at "vigorously pursuing but balancing social justice, effective governance, and job creation. The central government's ease of doing business model is a wonderful ynthesis of this balance and consistent with our vision that industrial development is a means to an end."
"The ranking was just a down payment for this long journey: we are only in the first phase of a multi-year strategic plan to make Rajasthan a job magnet."