According To This World Bank's Report Gujarat And Andhra Pradesh Are India's Best Places For Business.

Gujarat, the state Prime Minister Narendra Modi ran for more than a decade, is India's best place for conducting business, the World Bank said on Monday, in a report that ranks the country's states in an effort to encourage them to cut red tape.

Gujarat: best place for conducting business

"The growth of business in India requires concerted action on several fronts - infrastructure, capital markets, trade facilitation and skills," said Onno Ruhl, the World Bank's India director. "The stark reality is that India remains a difficult place to do business."

The effort is part of the government's initiatives to improve India's position on the World Bank's 'Ease of Doing Business' ranking. India is 142nd on he list of 189 countries. The government wants India to breaking into the top 50 at the earliest. It expects to make it to the top 100 in the next ranking.  States were given six months to improve business environment based on 98 parameters in December, after the Department of Industrial Policy and Promotion (DIPP) got states on board for this initiative. DIPP then collected data on the steps implemented, asking 285 questions to all states and union territories in June this year. The information was reviewed by KPMG and World Bank for the final assessment of states.

Monday's report suggested that such steps as offering single-window clearances for administrative approvals, if followed by all states, could improve India's global ranking.

Reforms have changed how India does business 

It said that states -- including the top five, Gujarat, Andhra Pradesh, Jharkhand, Chhattisgarh and Madhya Pradesh -- had implemented reforms in online tax payments, construction, permits, electricity connections and environmental clearances in a specified time.

Rajasthan – sixth among 29 states

However, the states should set up electronic courts, and reforms relating to labour laws, land allotment and property registrations, the report said. "This is a defining moment for Rajasthan because improving our ease of doing business directly accelerates job creation for our youth," said Vasundhara Raje, the chief minister of Rajasthan. The state was ranked sixth among 29 states. Modi's government has taken several pro-business steps, such as rolling back plans to tax foreign companies and allowing them to invest more in insurance, defence, banks and other sectors.

Gujarat topped the list with a score of 71.14 percent

How are India's 32 states and union territories ranked?

The key parameters include:

1. Setting up of business

2. allotment of land

3. labour reforms 

4. procedure for environmental clearance.

The North East is at the bottom

Arunachal Pradesh fares the worst, followed by Nagaland, Meghalaya, Mizoram, Sikkim, Tripura and Assam. Then there's J&K, Andaman and Nicobar Islands, Chandigarh and Uttarakhand.

Punjab is best for setting up a business

Punjab leads all other business friendly states. "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. 

Gujarat leads environmental procedure compliance

Gujarat scores a whopping 100% for environmental compliance, followed by Andhra Pradesh (85.19 percent score).

Jharkhand leads India's labour regulation compliance

"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 said

Maharashtra is best for securing infrastructure

infrastructure utilities are easiest sourced in Maharashtra (88.89%) followed by Gujarat (75%) 

Gujarat led business environmental inspections

Inspections under the Water Act and the Air Act saw Gujarat come out first. "The only other State that has implemented computerised risk assessment for environmental inspections is Maharashtra," the report said. 

Dispute resolution: Delhi and Maharashtra are doing something about it

"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 leader? Maharashtra  at 55.56%.

(Inputs from Reuters, The Economic Times and Kunal Anand)