Ranking doesn't accurately reflect the level of business-conducive nature of the states. It reflects the willingness of states to reform and attract investments.
For the first time, as many as 18 states have staked claim to a perfect 100% score in implementing a 372-point reforms agenda on ease of doing business, submitting voluminous documents to back up their assertion, official sources told FE. Interestingly, no state has ever scored 100% since the ranking was started in 2015 to foster competition among states and improve their business environment.
The longer-than-usual time required for the verification of documents and the Centre’s decision this time to include stakeholders’ feedback (along with states’ claims) on actual reforms on ground have delayed the final ranking of states beyond the usual time in September or October every year.
The states that have claimed the perfect score this time include West Bengal, Karnataka, Andhra Pradesh, Telangana, Gujarat and Haryana. In 2016, Andhra Pradesh and Telangana jointly topped the list, with a 98.78% score on a 340-point reforms agenda, closely followed by Gujarat. In 2015, Gujarat had grabbed the first position, with a 71.14% score. States are ranked on a dozen parameters on ease of doing business, such as inspection enablers, single-window system, land availability and allotment, labour regulations, obtaining utility permits, access to information and transparency enablers, construction permits, registering property, paying taxes and contract enforcement.
The World Bank has been tasked with ranking states since 2016 to lend objectivity to the exercise, while the department of industrial policy and promotion (DIPP) has been overseeing the process and often acting as facilitator between the World Bank and states. The reforms agenda is fixed by the DIPP after extensive consultations with states.
While the evaluation of documents is learnt to be almost over, the process of gathering stakeholders’ feedback will take some time, said sources. So the ranking might finally come around April. “However, with actual users’ feedback, the delivery of reforms on various parameters of ease of doing business will be better tracked this time than earlier,” said one of the sources.
The World Bank is seeking feedback on 78 questions covering various aspects of ease of doing business.
So far, four states —Haryana, West Bengal, Jharkhand and Karnataka — have secured the first position with a 90.79% score. However, the scores might change and final ranking will be announced only after the entire process is over.
The ranking in ease of doing business is an assessment of how the states fare in implementing an action plan adopted by them with the help of the Centre within a particular time-frame. So it doesn’t accurately reflect the level of business-conducive nature of the states, as states with lower ranks might also attract higher investments than the ones with higher ranks. Nevertheless, it reflects the willingness of states to reform and attract investments.