Doing Business in Indian States

How Indian states are ranked in their ease of doing business?     

The ease of doing business rankings (EoDB) for Indian states 2020 was released by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry.

States are ranked based on various reforms undertaken by them including land administration, labor regulation, obtaining electricity and water supply permits, environment regulation, among others. In order to improve the business climate and attract domestic and global investors, states in India are continuously introducing reforms and investor friendly policies.

Andhra Pradesh has topped the ease of doing business rankings for Indian states. What measures has the state undertaken to attract foreign investors?

Andhra Pradesh has recently rolled out its new Industrial Development Policy 2020-23 which focuses on a sustainable model of growth, infrastructure development, and asset creation across ten key sectors including automobiles, electronics, food processing, textiles, pharmaceuticals and biotechnology, among others.

The policy aims to further improve the ease of doing business and incentivize high-value addition industrial investments. Key incentives are promised to micro, small, and medium enterprises (MSMEs) and women entrepreneurs as well as firms generating local jobs.

Many Indian states have released policies to boost manufacturing like Tamil Nadu’s Electronics Manufacturing Policy. Can you elaborate on such policies?

Tamil Nadu released the Tamil Nadu Electronics Manufacturing Policy 2020 which seeks to facilitate foreign investment in electronic systems design and manufacturing (ESDM) and promote the growth of homegrown startup enterprises.

Through this policy, the state wants to raise its manufacturing output to US$100 billion by 2025 and account for 25 percent of India’s total electronics exports. This would also entail the skilling of more than 100,000 people by 2024.

Recently, the Karnataka government has also announced an industrial policy, the ‘New industrial policy for 2020-25’ which incentivizes high-tech investments, boosts local jobs creation, and seeks to move industrial and technology hubs beyond the state capital, Bengaluru.

What are the various measures taken by the union government to improve ease of doing business in India?

India ranked 63 out of 190 countries in ‘Doing Business 2020’ report of World Bank. This was a jump of 79 places since 2014 as a result of government’s continued efforts. Significant improvements have been registered in resolving insolvency, dealing with construction permits, registering property, trading across borders and paying taxes indicators. 

Various measures by the government such as land and labor reforms, digitization of processes, building infrastructure, and provision of land for large manufacturing units, among others have improved the ease of doing business in India.