Gujarat tops World Bank's report on ease of doing biz here

In a bid to improve India's appalling 142 rank in the world when it comes to ease of doing business, the World Bank and the DIPP released state-wise rankings on Monday. Gujarat topped the list with 71.14 percent, followed by Andhra Pradesh at 70.12 percent and Jharkhand and Chhattisgarh bagging the third position. The states were judged on implementation of a 98-point Action Plan that included parameters such as setting up of business, allotment of land, taxation, etc.According to the report, only the states with implementation status of 75 percent and above would attain 'Leaders' status where none of the Indian states qualified. While there were only seven states with implementation status between 50-75 percent that attained 'Aspiring Leaders' status, there were nine with implementation status of 25-50 percent that attained 'Acceleration Required'. However, an apalling 16 states with 0-25 percent came under the implementation status list. These were in the 'Jump Start Needed' status.Speaking to CNBC-TV18, Arvind Virmani, Former Chief Economic Adviser, says this report is critical to meeting 'Make In India' initiative and reviving growth in India and maintaining it at higher levels.Quoting a young fellow, he said goods and services tax (GST) is important because it was a nightmare buying goods in Delhi and exporting or selling to UP or Haryana. “So, this whole issue of simplifying the tax system and also in filing. There are lots of difficulties they face at the state level,” he added.Below is the transcript of Arvind Virmani’s interview with CNBC-TV18\\'s Nayantara Rai.Q: The report just released on the DIPP website a few minutes back. I understand you won't have been able to go through all the details but these are the top five states in the country according to the World Bank. Gujarat, Andhra Pradesh, Jharkhand, Chhattisgarh and Madhya Pradesh. Are you surprised or is this on expected lines?A: Before going to that as we have been discussing in the country for the last two years or so ease of doing business is a critical element, both of the Make in India program, the policy of reviving growth to the level we have seen earlier and maintaining it at high levels given the uncertain global environment and so on. So, it is a very important study. Of course the states which make a greater effort will succeed if there is nothing inherent in it and the whole idea which at least from my perspective I like is that states should compete because to get jobs, job growth we have to have the environment which promotes small businesses, large businesses, all types of businesses. I was talking to a whole bunch of youngsters and when business is difficult it really affects the new start-up, the small person much more because of course it is important for the corporates but the corporates can always hire a person to do this kind of work but as I personally heard from several youngsters yesterday only that for them this whole issue of ease of business is very critical. So, it is a good thing that this ranking have been done and the idea is not down some state.Q: But if you were to go through the study what it says is that the top 10 sub areas in which states have implemented reforms and this is a the stuff they base their ranking on. 17 states have taken some general tax reforms and get this, only 16 have done reforms on Value Added Tax (VAT) registration, 16 for Central Sales Tax (CST) registration, only 15 have taken reforms as far as construction permits go. This actually shows up that there are lot of states that are behind the curve, they have a lot of catching up to do. You are only talking about 16 states which have allowed VAT registration for the period that is being reviewed by the World Bank?A: So, that is a good point. In fact the youngsters I talked to mentioned that one of the most difficult things they find is exactly that. It is not so much the income tax, in fact some of them told me that the personal income tax system is actually improving and in fact I remember one youngster who told me it took him one hour to file his income tax return. So, that is not the issue. The more important problem that they face is in sales tax, VAT etc and in fact again I was very encouraged. One person who was strongly in favour of GST because again a young, very socially conscious small entrepreneur who was very looking forward to the GST because it was a nightmare buying goods in Delhi and exporting or selling to UP, Haryana or something. So, this whole issue of simplifying the tax system and also in filing. There are lots of difficulties they face at the state level.Watch video for more.