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Are these states the most business friendly
Sep 19, 2015

As we have just noted, entrepreneurs face a lot of risks in setting up and running a business. However, the situation is not the same all over the country. The ease of doing business varies greatly across Indian states. Some states have favourable laws to encourage businesses. Many do not. The government is understandably concerned about this.

Recently, the Department of industrial Policy and Promotion (DIPP) complied a detailed ranking of all 29 states in India comparing them on this very issue. The criteria included procedures related to setting up a business, land allotment, obtaining permits, environmental clearances, labour laws, taxation, inspections, enforcing contracts etc.

Unsurprisingly, Gujarat came out on top. The idea behind this report seems to be to encourage the states with low ranking to get their act together. It will also help the higher ranking states to attract more foreign investment. The government seems to have concluded that 'Make in India' cannot succeed without the help of various state governments.

This is true up to an extent. However, it must be kept in mind a lot of the laws and regulations are made by the central government. The government has moved forward on issues regarding environmental clearances and labour laws. However, without more substantial reforms like GST and land acquisition, India's 'ease of doing business' ranking may not move up too much.

This Chart Of The Day was published in The 5 Minute WrapUp - Ignore the US Fed. This is way more important for India

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