A race to woo business

It is encouraging to learn that most states in India are in serious competition to attract investments, and have realised the best way to do that is to improve the ease of doing business. Andhra Pradesh and Telangana have been particularly competitive over the past many years: they have put into practice the single window for clearances, and most of the positive feedback has been about the ease of starting businesses. If some traditional manufacturing states like Maharashtra and Tamil Nadu have fallen behind on the index and rank below 10, it only shows how serious the competition has become. India itself has moved up to 100 in world rankings last year and hopes to reach 50th place soon.

The difference among the top three (Haryana is third) in rankings based on feedback is minute, reflecting the competitiveness among states to straighten out procedures on construction permits, environmental regulations and land availability. The obstructionist role of bureaucrats and the need to approach several leaders for clearances may have been constricted by this new zeal to attract industry and with it jobs, a major part of which would naturally go to locals. As a state building a new capital, Andhra is especially proactive in attracting not only business and industry but also educational institutions.

A leading deemed university’s chancellor was stunned not only by the speed at which clearances were given but also that Andhra sought him out with green signals in hand so that the project could be expedited. This new awakening, about the state facilitating rather than regulating, has enabled reforms to start in several states and Union territories. The latest rankings, based on user feedback, show the reforms are working.