Investors find it hard to do business with ​Telangana​?​

At the behest of the government, the World Bank has prepared the list of states of India on the basis of ‘Ease of Doing Business’ index. While Andhra Pradesh has been ranked number two in the country with 70.12%, next to Gujarat, which bagged the top of slot with 71.14%. Telangana state has been ranked 13, with a 42.45 per cent score. The ranking was based on an assessment on 98 parameters. Small states like Jharkhand and Chattisgarh surprised with 3rd and 5th position in the index.

These rankings were provided in the report titled ‘Assessment of State Implementation of Business Reforms’. 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. Is this survey is yielded results for Andhra Pradesh, while placing Telangana at 13th place.

Both Andhra Pradesh and Telangana have completed more than one year after formation of new States. The survey is aimed to reflect at what’s working and what’s not for businessmen looking to invest. Notwithstanding the disparity in the rank, the survey generated huge disappointment as well as well as celebrations all over the country losers and winners about the veracity of the rating and assessment of states and UTs.

While exercise was aimed at promoting business climate among the States and UTs to undertake reforms, but what is not good for the states is to trade charges on the objectivity of the ranking. This is an opportunity for the States to take stock of the situation rather than worrying about why the rank is so low.

· Firstly, the assessment was made based on data collected through a structured questionnaire of 285 questions that was completed by each state and UT Government. The data was then evaluated in detail jointly to ensure standard yardstick applied for all States.

· Secondly, the assessment took stock of the reforms implemented by States in the period January 1 to June 30, 2015 – a period which coincided with the fiscal consolidation of most states as they grapple with state finances as well as plans to raise resources for the new financial year.

· Thirdly, the initiative was part of the “Make in India” campaign started by the Central Government that will create growth, employment, reduce corruption and spawn Make in India initiatives across entrepreneurs. Currently, India’s rank itself in the World tables for Ease of doing business is an abysmal 142nd. So, the 98-point Action Plan is chosen to drill the list of all the factors which show whether the policy reforms at the Centre are percolating down to the State-level.

· Fourthly, there is nothing neither subjective nor incriminating in the Survey which seriously elevates one state at the cost of another. The survey divides 32 states' race to 100 percent implementation of the reforms. And, no state has implemented 75 percent or more. So there are no leaders, only aspiring leaders. Delhi, Haryana, Karnataka, Maharashtra, Punjab, Tamil Nadu, Telangana, Uttar Pradesh and West Bengal are the ones that need acceleration. However, the most number of states, as much as 50 percent, are in the jump start required category.

· Eventually, the survey is not just comprehensive but also complements the States for the best practices which gives a good benchmarking for the benefit of all the States vying with each other for the best.

Concrete Feedback reinforces the Champions. So, it is good for the Telangana state to take the survey in its stride. At the same time, it signals wherever progress is not happening for whatever reasons despite an inherent advantage. For instance, the Availability of Land, the survey mentions that 20 States including Telangana have comprehensive details of land banks available. However, only Andhra Pradesh, Delhi, Gujarat, Madhya Pradesh, Odisha and Tamil Nadu score positively on both parameters.

Again, both Telangana and Andhra Pradesh get the pat for formulating a single desk/single window system with clearly defined timelines for application filing, tracking and approvals, but how AP scores higher than Telangana for creating a Chief Minister’s dashboard used for effective monitoring of the applications received.

Apart from Single Window, the survey is to see how the two factor markets – land and labor – are dealt with by aspiring entrepreneurs, while going through the registration process under various State tax authorities. In case of AP, while all land records are digitized, municipal records remain work-in-progress. On the other hand, Telangana which, has done a commendable job in enforcing contracts by filling up more than 80 per cent vacant district court judge positions; in Infrastructure, only two documents are required for electricity connections and pollution control certificate is no longer a prerequisite, is not appreciated by the survey, which is due for credit.

Conclusion

There is an adage that goes what gets measured gets done. The survey is a reality checks for Telangana how it is impacting the ease of doing business. Sustained and time bound efforts would need to be undertaken to make this a long-term success. There is a scope for vast improvement for Telangana and a need to speed up reforms not taking the state-of-the-art infrastructure in Hyderabad for granted, as per the Survey and right now, Andhra Pradesh is basking in the glory of being voted as next-best after Gujarat despite inheriting a Greenfield capital and almost non-existent infrastructure. So, let us take in a positive stride, since it doesn’t help the cause to question the credibility of World Bank– most of the States that surged ahead in the past rankings by KPMG have become magnets for New Investments, they were not cribbers, they were doers.

By G.Rajendera Kumar

Deputy Statistical Office

Planning Department, Telangana