PM Modi's home state Gujarat, which topped the list last year, has slipped to third place, while Chhattisgarh is number four on the list, prepared by the World Bank and Department of Industrial Policy and Promotion or DIPP. The rankings are based on a 340-point Business Reform Action Plan.
On the World Bank's latest "Doing Business" report earlier this week, India place a disappointing 130 among 190 countries, unchanged from its position last year. But World Bank India director Junaid Ahmad, who was at the release of the report told NDTV, "Today's ranking indicates India is on runway about to take off, if you unbundle aggregate rankings, then India has significantly improved."
16 states have this year implemented more than 75 per cent of 350 plus listed reforms. In comparison only seven states had implemented 50 per cent of 285 listed reforms in 2015 and no state had implemented 75 per cent of them.
While Andhra Pradesh was second to Gujarat last year, Telangana - which was born only in June 2014 by carving a new state out of Andhra Pradesh - was 13th last year and has shown the most spectacular improvement.
Number three on the 2015 list, Jharkhand, has this year slipped behind Madhya Pradesh and Haryana. Also on the list of top 10 are Rajasthan, Uttarakhand - which had ranked 23rd last year-- Maharashtra and Odisha.
The Action Plan on which the states are rated includes reforms on 58 regulatory processes, policies, practices, or procedures spread across 10 reform areas spanning the lifecycle of a typical business, mainly include single window clearance, tax reforms, labour and environment reforms, dispute resolution and construction permits.
The exercise is aimed at making states compete on improving the business climate to attract domestic and foreign investments. "There is a healthy competition between states... and some of the poorer and smaller states have done so well that they are now in the top 10," said Commerce minister Nirmala Sitharaman.
PM Modi has set a target for India to feature in the top 50 on the World Bank list for ease of doing business. In discussions with global investors and at public rallies, PM Modi has listed a "higher rank in ease of doing business" as an achievement of his government.
The government said it was "disappointed" that its reforms and efforts are not reflected in the World Bank ranking. Commerce Minister Nirmala Sitharaman pointed out that the World Bank report doesn't take into account reforms carried out by various state governments to help businesses set up their operations.
Prime Minister Narendra Modi has asked top bureaucrats to analyse the World Bank report and give feedback on areas where there is scope for improvement.
New Delhi: Andhra Pradesh and Telangana are joint toppers on a list that rank states for ease of doing business, identified by Prime Minister Narendra Modi as an important marker for implementation of reforms. And while India ranked 130 out of 190 nations, the World Bank India director said it is on the "runway about to take off".