Hyderabad: Mere policy changes and amending laws for the sake of higher rankings would no longer help states secure better rankings in Ease of Doing Business from this year.
Central teams will visit each state to see for themselves whether or not the business reforms being claimed by states are being implemented on the ground level.
Inputs from companies, investors, trade bodies, labour organisations will be collected on the reforms claimed by state governments which will play a crucial role while determining the final rankings.
In 2015, Telangana state was ranked 13 in EoBD but topped the charts the very next year, dethroning Gujarat. The AP government, ranked No. 2 in 2015, shared the top spot along with Telangana state.
The Centre’s department of industrial policy and promotion had given rankings to states in 2016 based on 340 action points, which the state governments need to fulfill to get ranks.
The states just needed to fill the details online on whether or not they were complying with each of the 340 points and upload documents to support their claims.
There was no mechanism to check whether the states actually complied with the reforms. This led to mad rush between states to secure better rankings.
The competition turned ugly with the Telangana state government complaining to the Centre that AP had committed “data theft” from its portal to secure a better EoDB ranking. The AP government dismissed the allegations saying that as a state ranked second, it had no need to copy data from TS, which at that point was ranked 13.
TS chief secretary S.P. Singh, who reviewed the new EoDB ranking system with officials recently, said, “The DIPP has mooted a New Business Reform Action Plan for 2016-17 covering 13 Secretariat departments and 27 HoDs. All the departments have been directed to ensure the reforms to be implemented at the ground level. The number of action points on which states will be judged have been decreased to 294 this year against 340 last year.” He said four new departments and eight heads of departments had been added to the list this year.
State cracked in 6 months
Stung by AP, without even a capital city, getting the second rank in Ease of Doing Business in 2015 while it landed up 13th, the TS government went into overdrive to improve its standings.
The TS government felt that the state lagged behind because of the negligence of departments and officials who failed to take decisions tailored to boost EoDB rankings.
IT minister K.T. Rama Rao, who had just taken over the industries portfolio from Mr Jupally Krishna Rao in early 2015, set a target for officials to ensure that TS stands among the top 5 states in the rankings in 2016.
Mr Rama Rao conducted periodic reviews with all crucial departments covered by the EoDB rankings. As many as 66 meetings were held departments in about six months. The government amended 26 laws, issued 50 new orders and 121 circulars to secure better ranking last year.
Besides, 19 portals were launched and 113 new online services were added, including 22 in the labour department to cut down inspections and give faster approvals. All this was done in a five-six months. This worked, and TS was ranked at the top in 2016.
Several low income states also secured better rankings based on their claims of implementing up to 90 per cent of reforms stipulated by the Centre. With this, the Centre has decided to to check states from bringing ‘tailor-made laws and GOs’ to suit EoDB ranking needs.