The state has implemented reforms in 368 of the 372 areas for reforms listed by the government in areas such as paying taxes, protecting minority investors, and construction permits.

Andhra Pradesh has topped the government's ease of doing business index, ahead of the industrialised states such as Gujarat, Maharashtra and Tamil Nadu.

Andhra Pradesh scored 98.42 percent in the third edition of Department of Industrial Policy and Promotion's (DIPP's) Business Reforms Action Plan, and is followed closely by Telangana with a score of 98.33 percent.

Here are factors that contributed to the state's score:

High reform evidence and feedback scorecard

The final rankings are a result of a combination of "reform evidence score" and "feedback score". Andhra Pradesh scored 99.73 percent and 86.50 percent in reform evidence and feedback, respectively.

The state has implemented reforms in areas such as paying taxes, protecting minority investors, issuing construction permits, providing new electricity connections, registering property and ease in starting a business.

Reforms in construction permits

The state has successfully implemented 90 percent of the reforms listed in construction permits.

With an aim to further improve ease of doing ranking of India, the Narendra Modi government is mulling changes in arbitration law. The central government is likely to come up with amendments in legislation which its said will invite more international entities. According to the World Bank’s latest annual Ease of Doing Business report, India now ranks 100th among 190 countries. Last year it was placed at 130th spot. India Inc had said the improved performance will boost investor sentiment, even as the industry believes a “lot more needs to be done” on the reforms front. Earlier, a panel set up to suggest changes in arbitration law proposed formation of a promotion council and a dedicated band of lawyers to contest such cases, according to reports.

The annual ranking of Ease of Doing Business is topped by New Zealand with 86.55 points, followed by Singapore, Denmark, South Korea and Hong Kong, which is now under the control of China. The US and the UK are ranked 6th and 7th respectively. Among BRICS countries, Russia tops the list on the 35th position, followed by China which has retained its ranking at the 78th place for the second consecutive year. Brazil, despite improvement in its score, is now at 125th place.

The State Urban Development Department (UDD) has put in place fresh deadlines under the Right to Services Act to give faster approvals to construction projects.The UDD was one of the last remaining departments to set deadlines and designate officers responsible for meeting them under the Maharashtra Right to Public Services Act, 2015. Similar directives were issued under the Central government’s Ease of Doing Business initiative, but State government officers were not held guilty for missing deadlines.

As per the new deadlines, certificates for building commencement will have to be issued in less than 30 days, for plinth in seven days, occupation in eight days and tree-felling permissions within 45 days. The last are issued under section 8(4) of the Maharashtra (Urban Areas) Protection and Preservation of Trees Act.

Bengaluru: Buoyed by the record investment proposals it received in the previous years, the state government has introduced some more reforms to improve ease of doing business. As a first step, it has included several services offered by the Karnataka Industrial Areas Development Board (KIADB) under Sakala which ensures time-bound service to investors.

"Timelines have been fixed for most of the services provided by KIADB under the Karnataka Guarantee of Services to Citizens Act (Sakala) to provide swift and timely services to the investor community," industries minister R V Deshpande said on Thursday. Issuance of allotment and possession letter, execution of lease-cum-sale agreement, sanction of building plan up to 2 acres/more than 2 acres, issuance of NOC in favour of KPTCL/Escoms and permission for water supply connection have been included under Sakala.

Karnataka would grant approvals and clear projects online for ease of doing business in the state, said Large and Medium Industries Minister R.V. Deshpande on Friday. "Our government will ensure statutory and pre-project clearances are given online for ease of doing business in the state, especially to the micro, small and medium enterprises (MSME)," he told about 3,000 delegates at the Vendor Development and Investors Summit here.

Asserting that the state government had already streamlined the process for approvals and clearances online, Deshpande said the landscape offered immense opportunities for partnerships in a range of sectors for the growth of MSMEs. "Karnataka is on the path of sustainable, equitable and inclusive growth through policies that improve productivity, wages, employment and outcomes," said the Minister. Exhorting the MSMEs to assess the export potential of their products and services, Deshpande urged them to explore new markets, joint ventures, franchising, cross-marketing and co-manufacturing.

New Delhi: After the indirect tax regime was transformed by the implementation of the goods and services tax (GST), the 56-year-old Income Tax Act is now set for an overhaul. On Wednesday, the finance ministry sets up a six-member task force to draft a new direct tax law that will better serve the country’s economic needs by widening the tax base, improving compliance and ease of doing business. Prime Minister Narendra Modi observed at a tax officials’ conference in early September that the Income Tax Act of 1961 was over half-a-century old and needed to be re-drafted.

Arbind Modi, member, Central Board of Direct Taxes, was named convener of the six-member panel that has been tasked to draft a new law. Modi was also a key contributor to the direct taxes code proposed by the previous United Progressive Alliance government. Almost all the ideas in the proposed direct taxes code—including General Anti-Avoidance Rules meant to crack down on complex corporate arrangements aimed at tax evasion and provisions to tax offshore transfer of assets located in India—have already been adopted in the existing Income Tax Act. Also, a key proposal in the erstwhile direct taxes code of phasing out corporate tax exemptions and lowering of the tax rate to 25% from 30% is being implemented in stages.

As a part of ease of doing business, the state government has proposed labour reforms in the Industrial Disputes Act to ease the closure of factories without any hassles of retrenching the labourers in the state.  According to the officials from the labour department, any factory having more than 100 employees requires government permission for closure. Now, it has proposed to increase that number to 300 in the Industrial Disputes Act. It has also proposed to add a new section in the Act for raising any dispute related to retrenchment or dismissal from service within three years only. At present, there is no such bar on raising the dispute and can be raised at any time.

Besides, it has also proposed that factories would not require any prior permission of the government for closure if the employers pay sixty days average pay for every completed year of continuous services at the time of retrenchment. Currently, there is no such provision in the Act. It also proposes to increase the compensation to be given to retrenched labourers by three times.

India is proposing a radical change in the legal framework on contracts to make them enforceable, thus creating a more stable and predictable business environment and boosting investment, especially in the country’s infrastructure sector.  A cabinet note will soon be moved by the ministry of law and justice to amend the Specific Relief Act toward this end. The move is expected to lift the country’s rating in the World Bank's Doing Business index as it’s a measure on which India does  poorly, having been ranked at 164 out of 190 on this score. 

Prime Minister Narendra Modi wants the country to break into the top 50, boosting India’s attractiveness as an investment destination. “Details have been finalised... It will go to cabinet soon,” a top government official told ET. The changes are aimed at widening the ambit of enforceability beyond just compensation.