In one of the previous articles, I had expressed concerns for the waning sentiments in general for Gujarat which apparently showed decline in a lot of issues and rest of the states giving tough competition to Gujarat. The concerns were aired which showed investments declining in Gujarat when compared with the recent developments.
The huge investments going to Tamil Nadu and Andhra Pradesh also downplayed Gujarat’s legacy. It also portrayed the current Gujarat Government’s inability to tackle issues related to law and order. We had also stated that it would be welcome news if these speculations are proven wrong.
The World Bank’s first ever ranking of states on “the ease of doing business” has uprooted all these theories and has shown results otherwise. It has given top spot to Gujarat after extensive research and juggling with figures.
The report was prepared by taking support from KPMG, CII, FICCI and Union Department of Industrial Policy and Promotion.
The states were evaluated on the basis of implementation of 98-point reform plan. These evaluations were done for over a six month period for the first half of current year.
The Chief Secretaries of the states participating in “Make in India” workshop formed an action plan on “Ease of doing business”. This workshop was inaugurated by the PM himself in December last year.
The committee decided to evaluate the progress by each state and provide a valid rank to each participant. The data released by the World Bank showcases the progress made by each state in which the BJP ruled states have grabbed pole positions with an unprecedented five of the top six spots; the odd one out also being an NDA ruled state.
Gujarat was ranked first. Jharkhand followed by Andhra Pradesh has grabbed third spot, Chhattisgarh and Madhya Pradesh being fourth and fifth respectively. Gujarat implemented 71.14% of the reforms with Andhra Pradesh implementing 70.12%, Jharkhand 63.09%, Chhattisgarh 62.45% and Madhya Pradesh implementing 62%.
These results have surely conformed to the PM’s agenda of development and making India an investment friendly entity. Even though the rivals have criticised NDA for not fulfilling its promises, the results show the NDA governments moving on right track, albeit slowly. Considering the fact that the scams and policies of the previous Central Government have deteriorated the reputation of the country being investment friendly, these steps are quite remarkable.
Some of the largest recipients of foreign investment, Maharashtra and Tamil Nadu have been slow in implementing reforms and are ranked eighth and twelfth respectively, both scoring less than 50 percentage points. Rajasthan was ranked sixth, Odisha seventh, Karnataka ninth and Uttar Pradesh tenth.
Congress ruled states fared poorly on these parameters. Its government in Kerala, Assam and Uttarakhand ranked nineteenth, twenty second and twenty third respectively. The rest of the ranking is as follows:
- West Bengal
- Tamil Nadu
- Telangana
- Haryana
- Delhi
- Punjab
- Himachal Pradesh
- Kerala
- Goa
- Puducherry
- Bihar
- Assam
- Uttarakhand
- Chandigarh
- Andaman and Nicobar Islands
- Tripura
- Sikkim
- Mizoram
- Jammu and Kashmir
- Meghalaya
- Nagaland
- Arunachal Pradesh
The area focused for assessment were: Setting up of a business, allotment of land and obtaining construction permits, complying with environmental procedures and labour regulations, registering and complying with tax procedures, obtaining infrastructure related utilities, carrying out inspections and enforcing contracts.
Gujarat was ranked best for “complying with environmental procedures”. Jharkhand ranks best in two categories, “carrying out inspection” and “enforcing contracts”. Maharashtra topped in “obtaining infrastructure related utilities”, Madhya Pradesh in “allotment of land and obtaining construction permits”, Karnataka being best in “registering and complying with tax procedures” and Punjab being best suited for “setting up of business”.
The World Bank Country Director Onno Ruhl said, “The ranking reflects the ease of doing business in these states by the small and medium enterprises rather than foreign investors”. He further added “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”.
This report suggests that such steps as offering single window clearances for administrative approvals, if followed by every state, can improve India’s global ranking which currently fares at 142 among 189 nations, much below Pakistan and Iran.
The results of this report shows the hard work by the previous Government of Gujarat which was ruled by the PM for more than a decade is still tough to challenge. This legacy is effectively carried forward by the current State Government.
Since taking charge in May 2014, PM Modi has set an ambitious target of improving India’s national ranking by 2017. The results of this report can help the Central Government in helping those states to be industry friendly who fared poorly in this assessment. This would surely add substance to PM’s ambition of bringing India among top 50 industry friendly nations.
Sources:
http://in.reuters.com/article/2015/09/14/india-economy-regulations-gujarat-idINKCN0RE1HD20150914
