Why are Andhra and Telangana the easiest places to do business in India according to the World Bank and DIPP?


Andhra Pradesh and Telangana have jointly dislodged Gujarat to emerge as the best states to do business in the country, according to a report by the World Bank and DIPP.

Image created by Aditya Ranade

Chhattisgarh, Madhya Pradesh, and Haryana occupied the 4th, 5th and 6th slots in the index, based on the implementation of DIPP's 340-point Business Reform Action Plan. Commerce and Industry Minister Nirmala Sitharaman said while releasing the report,

States are really competing with each other. Healthy competition is happening among all the states. Everybody is monitoring everybody's performance.

She, however, said that more efforts are needed to encourage states like Jammu and Kashmir (at 31st) and other north-eastern regions to improve their business climate. Nagaland, Manipur, Mizoram, and Sikkim stand at 26th, 28th, 29th, and 30th positions, respectively.

There is a long way to go, she said, adding that this time, 15 states have implemented reforms suggested by the ministry, as compared to seven last year.

Interestingly, eight out of the top 10 states are ruled by BJP-led NDA. While Telangana is ruled by TRS, Uttarakhand has a Congress government. The business reform action plan for states and UTs includes reforms on 58 regulatory processes, policies, practices, or procedures spread across 10 reform areas spanning the lifecycle of a typical business. These are mainly single-window clearance, tax reforms, labour and environment reforms, dispute resolution and construction permits.

In 2015 Index, Gujarat featured at the top, with Andhra Pradesh grabbing the second position and Telangana 13th.

As per the latest 2016 index, those in the list of top 10 states in India providing a better climate for businesses include Jharkhand (7th), Rajasthan (8th), Uttarakhand (9th) and Maharashtra (10th). Among other major states, Odisha occupied the 11th slot, followed by Punjab, Karnataka, Uttar Pradesh, West Bengal and Bihar, Himachal Pradesh, Tamil Nadu and Delhi. These rankings were provided in the report titled 'Assessment of State Implementation of Business Reforms 2016' which was prepared by World Bank in association with the Department of Industrial Policy and Promotion (DIPP). The exercise is aimed at promoting competition among states with a view to improve the business climate to attract domestic as well as foreign investments.

In the World Bank's latest 'Doing Business' report, India's place remained unchanged from last year's original ranking of 130 among the 190 economies.

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However, Andhra Pradesh Chief Minister N Chandrababu Naidu expressed his happiness over the state's No 1 ranking in ease of doing business in the country and complimented the state departments over the achievement.

I am very happy to share that DIPP and World Bank have announced AP as the No 1 state in ease of doing business rankings 2016 with an overall implementation score of 98.78 percent. I congratulate all departments of the government, the Industries Department in particular, for their efforts towards making AP the No 1 state in ease of doing business," he said at the meeting of the Council of Ministers here this evening.

Last year, the state was ranked second after Gujarat with a score of 70.12 percent.

In spite of all the challenges due to bifurcation, AP was ranked No 2 last year and I was very confident that we would achieve No 1 rank this year, the Chief Minister said.

AP scored 100 percent in eight out of the 10 reform areas benchmarked under the BRAP. An online system detailing all state approvals required for specific businesses put in place by AP has been recognised as the best practice by DIPP and World Bank, Naidu said. The ministers congratulated Naidu, who holds the Industries portfolio along with some other departments, over the achievement.