Andhra Pradesh, Telegana Top in Ease of Doing Business

In recently released, World Bank’s Ease of doing Business Report 2017 India stood at 130th position in the world. Now, a sub-ranking of India’s States on the same Ease of doing business 2015-16 has also been released and Andhra Pradesh and Telangana have jointly topped the list.

Important Observations from the Report:screen-shot-2016-11-01-at-9-06-14-am

  • Four of the seven States with the lowest income levels in India have made it to the top 10. These are:
    • Fourth- Chhattisgarh (97.32 % Score),
    • Fifth – Madhya Pradesh (97.01 %),
    • Seventh- Jharkhand (96.57 %),
    • Eighth – Rajasthan (96.43 %)
  • All the seven low income level States had an implementation rate of over 75 per cent.
  • Last year’s topper Gujarat slipped to the third spot.
  • States of Arunachal Pradesh, Jammu and Kashmir, and Meghalaya have scores between 0 and 1 on a scale of 100.

About Ease of Doing Business Index of Indian States:

  • The exercise is conducted by the Department of Industrial Policy and Promotion (DIPP) and the World Bank and covers the period from July 1, 2015 to June 30, 2016.
  • The idea of index was originally conceived under the Make In India campaign, a 98-point action plan for easing the regulatory framework for business at the state level was prepared by the DIPP in December 2014. A wider action plan was released in September 2015 covering 340 points.
  • Data is collected from states on a real-time basis and is reflected on the Business Reform Action Plan portal.

Reasons of India’s low ranking in World bank’s Ease of Doing Business:

Over the past two years, the government has implemented a host of reforms to make it easier for businesses to start, operate and exit. It is therefore disappointing that these achievements are not covered by the report due to methodological issues.

  • World Bank Group’s global Doing Business rankings does not consider reforms undertaken across the country, but just in Mumbai and Delhi. World Bank chief economist Paul Romer will visit India in November to specifically look into this methodology issue.
  • Important reforms like enactment of introduction of single window system for building plan approvals, bankruptcy code, GST,  and online ESIC (Employees’ State Insurance Corporation) and EPFO (Employees’ Provident Fund Organisation) registrations were not recognized by the World Bank this year, the ranking should improve better next year when these reforms are accounted.