Government to Start Ranking States on the Ease of Doing Business

Source: Economic Times

The Centre will soon start ranking states on the ease of doing business and in getting clearances, quietly pushing ‘competitive federalism’ along with ‘cooperative federalism’ that Prime Minister Narendra Modi called for at the first NITI Aayog meet on Sunday

The department of industrial policy and promotion (DIPP) has circulated 98 action points to state governments on “creating an enabling framework for simulating investments in manufacturing” with specific timelines for each action.

The states will be ranked based on these parameters that include the ease in setting up business, registration of property, labour compliances, infrastructure availability, finance and tax issues, inspection reforms and ease in exiting business

The move is in line with the Modi government’s goal to take India to the top 50 in the World Bank rankings on the ease of doing business, up from a lowly 142th position at present.

“They are passing on the pressure from the PM down to the states through this,” Karnataka’s commissioner for industrial development Gaurav Gupta told ET. “If one state is ranked low, it will be under tremendous pressure to improve that ranking in order to attract investments,” he said.

The ranking, to be done with the help of a consultative agency, is expected to be in place by June.

The action plan was made after consulting state governments across political lines as well as different industries. “They are asking us how the states can help manufacture or make in India,” Gupta said. “They ask us to explain what we are doing and then tell us what they expect of us.

Surendrakumar Bagade, Maharashtra’s development commissioner for industries, said the ranking will push each state to perform better.

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