DPIIT Starts Exercise to Rank States for Ease of Doing Business for Next Year

The Department for Promotion of Industry and Internal Trade (DPIIT) has started the exercise for the ranking of states and Union Territories in terms of ease of doing business for the next year, a top government official said. DPIIT Secretary Guruprasad Mohapatra said that the ease of doing business ranking of states and UTs for next year would be released by March 2021. “We have started the exercise already. We have communicated the Business Reform Action Plan (BRAP) for next year with the states/UTs, which they have to implement,” he told PTI.

Last year, the department had identified 181 reform points and for 2021, it has shared 301 such points with the states and UTs. The ranking is based on the implementation of BRAP and feedback received. It started in 2015. The action plan cover 12 business regulatory areas such has access to information, single window system, labour, and environment. So far, rankings have been released for 2015, 2016, 2017-18 and 2019. The exercise is aimed at promoting competition among states with a view to improving the business climate to attract domestic as well as foreign investments.

To help laggard states improve the ranking, Mohapatra said that “for next year, we have sent the reform agenda and we plan to engage ewith them in select groups, region wise. We will hold several rounds of meetings with them”. In the 2019 rankings, released by the DPIIT on September 5, Andhra Pradesh for the third time in a row has topped the chart . Registering a jump of 10 places in the rankings, Uttar Pradesh occupied the second position in 2019 as against 12th in 2018.

Telangana slipped to the third position from second in 2018. Among the laggard states and UTs in the ranking, Bihar was at 26th, Kerala 28th place, Manipur (31), Meghalaya (32), Nagaland (33), Odisha (34), Sikkim(35) and Tripura (36). As part of the economic package, the Centre on May 17 raised the borrowing limit of states from 3 per cent of gross state domestic product (GSDP) to 5 per cent in 2020-21, which will make available an additional Rs 4.28 lakh crore.

However, part of the increased borrowing limit would be linked to specific reforms – universalisation of One Nation-One Ration Card, ease of doing business, power distribution and urban local body revenues. The secretary said that this “shows the commitment of the central government that reforms are the only way to every activity”.

“We are going much beyond the World Bank’s rankings. Reducing compliance burden is the major exercise we are doing now,” he added.