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AP, Telangana top places to do biz in India, better than Gujarat

Sidhartha Shukla

Andhra Pradesh (AP) and Telangana, the two bitter political rivals created by the division of AP two years ago, jointly topped the ‘Ease of Doing Business Reforms Ranking 2015-16’, ahead of the so-called industrialised such as Gujarat, Maharashtra and Tamil Nadu.

N Chandrababu Naidu-led AP and the K Chandrashekhar Rao-led Telangana clocked an identical 98.78 percent in the “implementation scorecard,” a matrix of 58 regulatory processes and policies across 10 broad reform areas that impacts businesses.

Both AP and Telangana have laid out the red-carpet to investors, pitching their states as red tape-free hotspots, offering transparent systems, business-friendly bureaucracy, easier land buying rules, and quick decision-making.

India’s newest state Telangana, carved out after a decades-long agitation for a separate state, has positioned itself as a better competitor to neighbouring Bangalore for businesses such as software, semi-conductor and pharmaceuticals, with superior infrastructure and a responsive administration.

AP is creating a new capital city Amaravati, pitched as a modern metropolis armed with state-of-the-smart infrastructure. Also, Tirupati in southern AP is fast emerging as India’s mobile manufacturing capital with phone makers such as Micromax Informatics Ltd, Karbonn Mobile India Pvt. Ltd, Celkon Impex Pvt. Ltd,  and Xiaomi setting up plants in the temple town.

Handset makers are looking to tap the multi-billion dollar opportunity in India, which is one of the fastest growing smartphone markets in the world.

Both the states have leapfrogged Gujarat, Prime Minister Narendra Modi’s home state, which has come third in the latest rankings with a score of 98.21 percent.

The western state had topped the list’s initial edition last year.

The report has thrown up surprising results with Maharashtra, often touted as India’s most industrialised state led by the bustling financial capital of Mumbai, ranked 10th with a score of 92.86 percent.

Naxal-affected Chattisgarh has been ranked fourth ahead of Madhya Pradesh (rank 5), Haryana (rank 6), Jharkhand (7),Rajashthan (8), and Uttarakhand (9).

The rankings, jointly prepared by the World Bank and Department of Industrial Policy and Promotion (DIPP), serves as a check-list of sorts for evaluating states on a 340-point Business Reform Action Plan, between the period between July 2015 and June 2016.

Poll-bound Uttar Pradesh came in at rank 14.

“We are seeing a healthy competition among states, which we can’t afford to lose sight of because if the Prime Minister has put before us a target of reaching a rank of 50 or below 50 sooner, it is this kind of effort which is coming from the states, which is going to make a difference,” Niramala Sitharaman said while addressing a press conference.

The national implementation average stands at 48.93 percent, significantly higher than last year’s national average of 32 percent.

The latest listing of states, comes days after the World Bank’s annual Ease of Doing Business report ranked India 130, just a rung better than last year’s 131.

The government has said that the World Bank rankings have not taken into account key reforms such as the Bankruptcy Code and the Goods and Services Tax (GST), which would have helped India jump several notches.