Ease of Doing Business Rankings of the States

Recently, the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry released the 4th edition of Ease of Doing Business Rankings based on the State Business Reform Action Plan (State BRAP).

How did the states perform?

Andhra Pradesh secured the top spot for the third time since the ranking was first released in 2015.

UP jumped ten spots to number two and Telangana slipped to three.

Gujarat, which was first in the first-ever edition of the rankings, was ranked 11 this year; Haryana slipped all the way to 17.

How are the rankings arrived at?

The objective of DPIIT’s reform exercise is to provide a business-friendly environment, for which the regulations in a state have to be made simpler. Therefore, it devised a methodology to rank the states according to the ease of doing business (EoDB) in a state.

DPIIT provides a set of recommendations meant to reduce the time and effort spent by businesses on compliance with regulation called the Business Reform Action Plan (BRAP).

BRAP 2019 is an 80-point list of reforms recommended to simplify, rationalise and digitise the regulatory framework in a state.

What reforms does DPIIT recommend?

DPIIT recommends all states have a single-window system that provides all necessary information on permits and licences required for starting a business. Permissions required from municipal or village government bodies or police for activities like filming movies should also be explicitly mentioned.

Ease of Doing Business (EODB) :

It is a joint initiative by the Department for Promotion of Industry and Internal Trade (DPIIT) and the World Bank to improve the overall business environment in the States.

Ranking of all the States and Union Territories is done, based on the implementation of BRAP by them.

Business Reform Action Plan (BRAP):

It was launched in 2015.

BRAP 2019 contains a list of 80 reforms (187 reform action points) to be implemented by 19 State departments.

These reforms cover 12 business regulatory areas such as Access to Information, Single Window System, Labour, Environment, etc.

The reforms are grouped into 12 broad areas like land administration, labour regulation, obtaining electricity and water supply permits, environment regulation, etc. States are required to submit proof of implementing each reform on the DPIIT’s EoDB portal and submit a list of users of these reforms.

Objective

It was introduced to encourage a healthy competition between states.

This would help in attracting investments and increasing Ease of Doing Business in each State.