India rolls out ease of doing business ranking of states

In the report, compiled by the Ministry of Commerce and Industry, the top five positions in terms of ease of doing business among states were claimed by Andhra Pradesh, Telangana, Haryana, Jharkhand and Gujarat; India has 29 states and 7 union territories

July 10, 2018

The critical report comes after the DIPP and the Ministry of Commerce and Industry, along with the World Bank conducted an annual reform exercise for all 29 Indian states and 7 union territories (UTs) under the Business Reform Action Plan (BRAP)

States and UTs governments have conducted reforms to ease their regulations and systems in areas such as labour, environmental clearances, single window system, construction permits, contract enforcement, registering property and inspections

The assessment under the BRAP 2017 is based on a combined score of Reform evidence score that is based on evidences uploaded by the states and UTs and Feedback score that is based on the feedback garnered from the actual users of the services

DIPP has identified partner states to mentor another State and UT to facilitate implementation of reforms in states and UTs needing support. Telangana and West Bengal held extensive workshops to support Tripura and Nagaland, respectively

Government of India on July 10 released the final rankings of States in Ease of Doing Business. In the report, brought out by the Department of Industrial Policy and Promotion (DIPP), the top five ranks were secured by Andhra Pradesh, Telangana, Haryana, Jharkhand and Gujarat, respectively. The critical report comes after the DIPP and the Ministry of Commerce and Industry, along with the World Bank conducted an annual reform exercise for all 29 Indian states and 7 union territories (UTs) under the Business Reform Action Plan (BRAP). The aim of this move has been to improve delivery of Central Government provisions and services in an efficient manner in order to promote foreign and private trade and investment.

The reform plan has expanded from 285 to 372 action points till 2017. States and UTs have conducted reforms to ease their regulations and systems in areas such as labour, environmental clearances, single window system, construction permits, contract enforcement, registering property and inspections. States and UTs have also enacted Public Service Delivery Guarantee Act to enforce timelines on registrations and approvals. The current assessment under the BRAP 2017 is based on a combined score consisting of Reform evidence score that is based on evidences uploaded by the states and UTs and Feedback score that is based on the feedback garnered from the actual users of the services provided to the businesses.

It is for the first time that DIPP has introduced taking feedback to ensure that the reforms have actually reached ground level. The feedback was collected through physical interviews of actual users selected from more than 50,000 users of the services provided by the state and UT governments. 78 reforms out of 372 were identified for the survey. More than 5,000 private sector users in 23 states and UTs, including 4,300 businesses and 800 architects, lawyers and electrical contractors from across the country shared their experience. During this while, DIPP organised outreach programmes including 30 workshops and periodic video conferences with the states and UTs to create an ecosystem of supporting resources.

Another practice introduced in the current reform exercise has been support provided by higher scoring states. DIPP identified partner states to mentor another State and UT to facilitate implementation of reforms in states and UTs needing support. Telangana and West Bengal held extensive workshops to support Tripura and Nagaland, respectively. States have also provided their systems developed to other states so that everyone can benefit from this reform exercise. The state reform exercise under Ease of Doing Business has already created a lot of interest in other countries such as Brazil, South Africa and Indonesia, asserting the success such reforms for improving the business environment in India.

DIPP has already shared proposed reforms for the next year with the state and UT governments. As systems developed in the last three years have matured during the existing assessment cycles and the importance of the feedback from the users and success of obtaining user feedback in BRAP, 2017 has been proved, the next year’s assessment will be entirely based on user feedback, as per the official statement. In 2017, India had jumped 30 spots from 2016 to secure 100th ranking in World Bank’s Ease of Doing Business index on the back of Government of India’s efforts to amend regulations and offer improved market accessibility to foreign investors, leading to a strengthening of the economy.