Jharkhand set to top the ease of doing business ranking for states

Jharkhand Chief Minister Raghubar Das
The third edition of the government's ease of doing business index for states is set to be released on Tuesday evening and Jharkhand, Telangana and Andhra Pradesh are widely expected to top the list. 

Final data collected on an online dashboard maintained by the Department of Industrial Policy and Promotion (DIPP), which conducts the ranking, suggests so. 

Last year, DIPP had finalized a total list of 372 reforms in regulatory processes, policies, practices or procedures as part of the Business Reforms Action Plan 2017. This is spread across 12 key reform areas. Reforms successfully undertaken by each state are updated on the dashboard with the result that states with the highest implementation of reforms securing the highest ranks.

According to the dashboard, the states in the top 10 apart from the leading three are Gujarat, Haryana, Rajasthan, West Bengal, Chhattisgarh, Madya Pradesh and Karnataka, in that order. Notably, Uttarakhand and Maharashtra have fallen off the list while Karanataka has made a comeback.

Laggards progress slowly

Among the latest expected top 10, West Bengal has made a turnaround with regards to easing business processes. It had slumped to 16th position last year from the initial 11th position in the first rankings. Last years rankings saw Andhra Pradesh and Telangana emerging as the top states easiest to do business in, relegating Gujarat to the third place.

This year, only two states - Jharkhand and Telengana - have been able to implement the full 100 per cent of reforms. However, 17 states have scored above 90 per cent.

In the inaugural edition of the rankings, only seven states implemented more than 50 per cent of the reforms suggested by the government, while the second edition saw 18 states implementing more than that level. This year, that list has crept up to only 21 states.

However, the National Capital Territory of Delhi has shockingly scored a low of 34 per cent on a scale of zero to 100. This is significant as the World Bank only considers the ease of setting up a business in Delhi and Mumbai while calculating its final score for India.

In the state rankings, Delhi receives company from states traditionally weak in this regard such as Jammu and Kashmir, Tripura and Nagaland, apart from the union territories, which have scored below it. The government's aim of pushing industrial growth and entrepreneurship across the country may take a hit with states such as Arunachal Pradesh, Sikkim, Meghalaya and Manipur not implementing even a single reform and thereby securing a zero as their score.

User feedback introduced

The rankings were initially expected to be revealed by January 2018 but has been delayed. DIPP officials, now say it will be out within the next 4-5 weeks. "All of the procedures, including the validation of reforms by states are complete from the Centre's side. This year, we are taking industry feedback for the first time to make the process foolproof, with the final rankings calculated after that. This is why it has taken more time." a senior DIPP official said.

Out of the 372 recommendations, 78 action points will have feedback from the actual users or businesses. This is expected to help the government in checking the pulse of the users before this years global ease of doing business rankings roll in come November.

In 2017, India had for the first time broken into the club of the 100 nations easiest to conduct business in, driven by ease of paying taxes, resolving the insolvency problem, access to credit, and protection of minority investors. The World Bank’s ‘Doing Business 2018: Reforming to Create Jobs’ report had shown that India's rank in ease of doing business jumped 30 places to 100 among 190 countries.

The country has also been adjudged the fifth best-performing nation globally in reforming the business environment. The country improved its rankings in six of the 10 sub-categories used by the World Bank to judge the climate of business.