Punjab, 16th in ease of doing business, has easiest procedures to set up one

In the first of its kind ranking of states based on ease of doing business and reforms implementation, as many as six states that topped the ranks are ruled by the NDA, a study by the World Bank and KPMG has found. The study, commissioned by the government, was released yesterday and found that Gujarat topped the list with a score of 71.14 percent, followed by Andhra Pradesh (70.12%). These states are followed by Jharkhand, Chhattisgarh, Madhya Pradesh and Rajasthan. Odisha figures at 7th rank. “The assessment, the first of its kind, has been conducted to take stock of reforms implemented by states in the period January 1 to June 30, 2015 based on the 98-point action plan for business reforms agreed between DIPP and State and Union Territory governments on December 29, 2014,” said a press release issued by the ministry of commerce and industry. The top seven states have implemented over 50 percent of the 98-point action plan. However, no state has implemented 75 percent or more of the proposed reforms, the study found. “The assessment recognises the fact that most states have already embarked on ambitious reform programmes or expanded their ongoing reform efforts,” additional secretary in DIPP, Shatrughna Singh, has been quoted as saying in media reports. The ranking of 32 states and union territories was based on eight specified parameters which include setting up of business, allotment of land, labour reforms and procedure for environmental clearance. “What this report does very well is to provide a roadmap for states serious about improving their business environment and creating jobs,” World Bank country director Onno Ruhl said. Here are 10 graphics that summarise the study and its results:  Most of the the north-east states figure at the bottom 10 with Arunachal Pradesh faring the worst with a score of just 1.23 percent. Apart from Nagaland, Meghalaya, Mizoram, Sikkim, Tripura and Assam, the other states in the bottom 10 are J&K, Andaman and Nicobar Islands, Chandigarh and Uttarakhand.  The graphic above summarises the 32 states’ race to 100 percent implementation of the reforms. As explained earlier, no state has implemented 75 percent or more. So there are no leaders, only aspiring leaders, as is evident from the graphic. Delhi, Haryana, Karnataka, Maharashtra, Punjab, Tamil Nadu, Telangana, Uttar Pradesh and West Bengal are the ones that need acceleration. However, the most number of states, as much as 50 percent, are in the jump start required category.  In the area of setting up a business, Punjab has, surprisingly, trumped all the so-called business friendly states. It is to be noted that in the overall rank, the state is in the middle - at 16th spot. “Remarkably, Punjab is the only State in which the single window system allows application for all of the licenses studied in this assessment, although some others come very close,” the report says. The doted line in the graphic above is the national average, which stands at 31.91 percent.  As is evident in the graphic above, Madhya Pradesh is the top scorer in allotting land and obtaining construction permit. The BJP government in the state had in April this year promulgated an ordinance amending the Land Ceiling Act, a law that governs the farm land, in order to ease land acquisition for private players. The national average in this area stands at 34.57%.  This one again springs a surprise: Gujarat scores 100 percent in comlying with environment procedures. Andhra Pradesh follows with an 85.19 percent score. Currently, only Gujarat, Rajasthan and Odisha allow auto renewal for both environmental consents on the basis of self - or third-party certification, and their consents to operate are valid for 5 or more years, the report noted. The national average is 31.61%.  Jharkhand, which has an overall 3rd rank, is 100 percent compliant with the labour regulations. The National average is 33.18%. “Jharkhand’s Labour Department is the only one in the country to score 100% on all four parameters studied in this assessment across all 7 processes. Andhra Pradesh also deserves a mention as the Labour Department provides clear information, timelines and online solutions, but lack downloadable and verifiable certificates,” the report has noted.  Obtaining infrastructure related utilities is the easiest in Maharashtra. The state scores a high 88.89 percent on this. Gujarat is the second with a 75 percent score. The national average is 32.01 percent.  Karnataka scores a high 97.73 percent on tax procudures front. The report terms the state’s registration processes groundbreaking. “On average, 10 States offer clear information on the tax registration procedures, 15 feature defined timelines, 9 have fully online registration systems, while 7 allow for downloadable certificates,” the report notes. The national average in this parameter is 48.61 percent.  Gujarat is the only clear winner on the two environmental inspections. The state has also scored positively on inspections under the Water Act, and the Air Act, the report has said. “The only other State that has implemented computerised risk assessment for environmental inspections is Maharashtra,” the report said. However, Jharkhand tops this area with a score of 72 percent, followed by Gujarat (71.74 percent). The national average is a lowly 19.45 percent.  Clearly dispute resolution is the most difficult area for businesses. The report notes that as many as 20 states have begun recruiting judges to fill the district courts. Only 8 have filled 80 percent of the vacancies in these courts. “Unfortunately, only 2 States – Delhi and Maharashtra – have introduced specialized commercial courts, and only Gujarat has made available model contract templates and guidelines on the department website,” the report notes. The top scorer in this area is Maharashtra - 55.56%. The national average is 16.49 percent.