If you thought Gujarat, Maharashtra and Tamil Nadu were the most attractive investment destinations in India, think again. States and union territories such as Himachal Pradesh, Uttarakhand, Telengana, Lakshwadeep, Daman and Diu, which have little reckoning as the favorites of businesspersons, have shown significant progress in improving their business environment.
Their ranks in the states’ ease of doing business (EOD) index have shown huge improvements. While Andhra Pradesh topped the chart, Uttar Pradesh secured the second position and Telengana the third. Gujarat, the state which was placed in the number one slot in 2015, when the states’ EOD index was launched has slipped to number 10. Punjab, Bihar and Kerala have shown little improvement.
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Sample this. Himachal Pradesh was placed at number 17 in 2015. In the 2019 ranking, it was placed at the seventh slot. Similarly, in 2015, Uttarakhand was in the 23rd spot as far as EOD ranking went. In 2019, it secured the 11th position. Lakswadeep and Daman and Diu had secured 33rd rank in 2015. Now the two Union Territories are at 15th and 18th places.
“We need to understand that several states have done very well in improving their business climate. Many of the states that were lower down in the ranking have significantly improved their rankings. This will help in drawing investments. After all, investments will happen in the states and they need to be prepared,” Deepak Bagla, CEO and managing director, Invest India, told IndiaNarrative.com.
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Private investments in the country have been sluggish for years now, even as India is placed at the 63rd position in the World Bank’s EOD index.
The Narendra Modi government has decided to press the peddle in improving the business climate to woo investors—both domestic and foreign—as the chorus for de-risking and diversification gains ground in the wake of the coronavirus pandemic and China’s increased aggression.
An insider said that talks are already on with several multinationals for investments in the country.
Against the backdrop of the country’s gross domestic product (GDP) contracting 23.9 per cent due to the stringent lockdown across the country in the first quarter of this fiscal, the government has gone on an offensive in bringing about the much needed reform process. The Confederation of Indian Industry’s (CII) chief economic Bidisha Ganguly noted that measures such as performance-linked investment scheme and reduction in corporate taxes will go a long way in boosting investments.
On Saturday, the Center introduced three critical labor legislations in the Lok Sabha—the Industrial Relations Code Bill, 2020, the Code on Social Security Bill, 2020, and the Occupational Safety, Health and Working Conditions Code Bill, 2020. These will enable states in fixing hiring and firing norms besides providing more social security to the workers. The states will also be able to fix working hours in the factories and other establishments and restrict the workers from forming unions..