World Bank ranks Gujarat as most investor-friendly State

September 15, 2015 03:07 am | Updated 02:45 pm IST - New Delhi:

Gujarat has come out on top in the World Bank’s first ever ranking of States on the ease of doing business in India.

States were assessed on the implementation, over a six-month period from January to June, of a 98-point reforms agenda.

Chief Secretaries of States participating in the “Make in India” workshop inaugurated by Prime Minister Modi in New Delhi last December finalised this action plan on “Ease of Doing Business”.

It was decided later to evaluate States to assess progress by June 2015.

BJP-governed States dominate the top ranks. Gujarat implemented 71.14 per cent of the reforms, according to the assessment. Andhra Pradesh came second with a score of 70.12 per cent, Jharkhand third at 63.09 per cent, Chhattisgarh fourth with 62.45 per cent and Madhya Pradesh fifth with 62 per cent.

The largest recipients of foreign investments, Maharashtra and Tamil Nadu, are ranked eighth and twelfth with less than 50 per cent scores.

Annual exercise “The rankings reflect the ease of doing business in these States by the small and medium enterprises rather than foreign investors,” said World Bank Country Director Onno Ruhl.

The Union Department of Industrial Policy and Promotion, the Confederation of Indian Industry, Federation of Indian Chambers of Commerce and Industry (CII) and KPMG were involved in the exercise.

The rankings of States will be released annually.

“It is expected that investments will begin to flow to States that make it easier to do business, seeing which the low-rank States could be encouraged to take up reforms,” said former CII president Sunil Munjal at the release of the report.

The focus of the study is on eight key areas: The setting up of a business, allotment of land and obtaining construction permit, complying with environment procedures, complying with labour regulations, obtaining infrastructure-related utilities, registering and complying with tax procedures, carrying out inspections and enforcing contracts. States made good progress in terms of tax reforms, the report stated.

Punjab emerged the best performer in the category ‘setting up a business’ and Maharashtra in ‘obtaining infrastructure-related utilities’. Madhya Pradesh topped ‘allotment of land and obtaining construction permit’ and Karnataka ‘registering and complying with tax procedures’. Gujarat was assessed as the best for ‘complying with environment procedures’. Jharkhand is the best in two categories: ‘carrying out inspections’ as well as ‘enforcing contracts’.

“While the World Bank has been working for many years with officials of the Government of India, this gained traction only in the last one year thanks to the political commitment coupled with renewed efforts of officials of Central and State governments to make India an easy and simple place to do business,” said Mr. Ruhl.

StateState Score
Andhra Pradesh70.12%
Madhya Pradesh62.00%
Uttar Pradesh47.37%
West Bengal46.90%
Tamil Nadu44.58%
Himachal Pradesh23.95%
Andaman and Nicobar Islands9.73%
Jammu and Kashmir5.93%
Arunachal Pradesh1.23%

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