Business report card on AP & T

Primepost News Desk

Telangana State Chief Minister K Chandrasekhar Rao who is touring China with a large delegation to attract investment may be feeling a bit uneasy after seeing the report card on doing business in different states in the country. His state has fared badly in a study done by the World Bank and the central government’s Department of Industrial Policy and Promotion (DIPP) on the ease of doing business. While Telangana occupied the 13th position, Andhra Pradesh was ranked second in the report that was released on Tuesday.

In positioning the 32 states and Union Territories, the study has taken 98 parameters into consideration, from business and labour reforms to allotment of land, environmental clearance and the time taken to get approvals from different departments and clearing of files by officials.

In overall performance, Gujarat topped the list, scoring 71.14%, followed by Andhra Pradesh (70.12%). The Telangana State scored 42.45%, a notch below Tamil Nadu and above Haryana. Among the top six states after Gujarat and AP are: Jharkand (63%); Chattisgarh (62.45%); Madhya Pradesh (62%) and Rajasthan (61%). Incidentally, all these are NDA-ruled states.

The report busts some popular myths like Maharashtra is more business-friendly. Its standing at No 8 with 49.43% score is below Odisha which is at No 7 with 52.12%. Karnataka, the hub of IT industry, comes next to Maharashtra with 48.5%. At the bottom of the table in single digits (in ascending order) are: Arunachal Pradesh (1.23%); Nagaland; Meghalaya; Jammu and Kashmir; Mizoram; Sikkim, Tripura and Andaman and Nicobar islands.

According to a press release issued by the Ministry of Commerce and Industry, “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.”

What is significant is while the top seven states have implemented over 50% of the action plan, no state has undertaken 75 % or more of the proposed reforms, indicating that even the toppers have to do much more to meet the hundred percent criteria laid out in the action plan.

The survey’s statistical data is both interesting and revealing. It has grouped the 32 states and UTs into four categories according to their percentage of scores: Leaders; Aspiring Leaders; Acceleration Required and Jump Start Needed. According to these categorizations, there are no leaders. While the top six states plus Odisha come under Aspiring Leaders category, nine states, including Telangana, put under Acceleration Required group. The rest of the 16 states and UTs need “jump start”.

However, scores vary, category-wise. For example, Punjab tops in “Setting up business” with a score of 81.48%, followed by AP (78.57%), Chattisgarh, Odisha and Rajasthan. In the allotment of land and getting building permits, Madhya Pradesh’s rank is first and AP’s fifth. In complying with environment procedures, Gujarat tops with a surprising score of 100 per cent followed by Andhra Pradesh (85.19%). In labour reforms, the mineral-rich state of Jharkhand has the best record of 100% whereas AP stands fourth with 75% after Gujarat and Chhattisgarh. In infrastructure, Maharashtra has scored over others and AP, not surprisingly, comes last in top five.

Surely, the report provides a comprehensive roadmap for all the states and Union Territories to identify the grey areas in industrialization and help in attracting domestic and foreign investment. On the other hand, the survey results give state governments like Telangana and Andhra Pradesh to tie loose ends in official mechanism and plug loopholes in plan implementation.

Predictably, AP Chief Minister Chandrababu Naidu has patted himself on the back and lauded his officials for the good show in a short span of just over a year after bifurcation. Naidu, who has been vigorously trying to promote business-friendly environment after having lost bulk of industries to Telangana, has promised to make AP a ‘Leader’ in doing business.

Telangana, on the other hand, has to push hard to join the top rankings. With plenty of land at its disposal and excellent connectivity and infrastructure, it should not be difficult for the KCR government to forge ahead and create conducive business and industrial atmosphere. The government is already moving in that direction and the Chief Minister has made many promises to make the Telangana State No 1 destination for investors. Now, the World Bank report has put the ball in his court.

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