While there is an outcry that business and industry are hijacked to Gujarat from Maharashtra, the latest report of the Department for Promotion of Industry and Internal Trade (DPIIT) regarding the ranking of the states based on various parameters should work as an eye opener for the policy makers in the state.
Against the backdrop of chief minister Eknath Shinde’s announcement from Davos that massive investment is expected in Maharashtra in the near future, these rankings need to be analysed dispassionately to chart out a future plan of action. Given the general elections due this year, not much governmental activity is likely to happen. Hence, ample time will be available for making preparations for the next five years, whichever party comes in power.
First, it is necessary to understand how the rankings are decided and announced. There is a Department for Promotion of Industry and Internal Trade (DPIIT) Under the Ministry of Commerce and Industry in New Delhi. It commenced the exercise to create a conducive business environment by streamlining regulatory structures and promoting an investor-friendly business climate for the entrepreneurs. The plan was initiated in 2014 by identifying the reforms which need to be undertaken by the states. With support and partnership of the World Bank Group, DPIIT understood the essence of various reforms through various workshops it organised. DPIIT released the first Business Reform Action Plan (BRAP) in 2016. A draft action plan consisting 340 points was prepared after consultations with various states and Union Territories (UTs).
The draft introduced recommendations on 58 regulatory processes spread across ten reform areas. Every year, the action points, recommendations and regulatory processes are revised. According to BRAP 2017–2018, the action points were updated to 372 and nine reform areas. The ranking of states and UTs is based on BRAP scores. A higher ranking indicates a more conducive environment for starting and operating a business in that particular state or UT.
Accordingly, the ranking for 2022 has Gujarat, Kerala, Karnataka and Tamil Nadu as best performing states in the start-up category, based on their initiatives to develop the start-up ecosystem for promoting budding entrepreneurs. Maharashtra, Odisha, Punjab, Rajasthan and Telangana are categorized as top performers in the same exercise.
Interestingly, once a backbencher, Odisha has nurtured over 1800 start-ups across agritech, IT, AI, healthcare, fintech, and biotechnology sectors. More interesting is the fact that almost 42 percent of them are led by women. Odisha is confident of fostering at least 5000 start-ups by 2025. The state has 27 incubators and among them is the state-run O-Hub, spread on a huge four lakh sq ft area. Presently, there are 75 active Entrepreneurship Cells (E-cells) and 93 incubates.
Start-up Odisha executive director Omkar Rai has stated that Odisha retaining the ‘top performer’ status is a testament to its commitment. Not just maintain but elevate the capabilities of its start-up ecosystem is the approach. Odisha is creating a new start-up policy, which is under consideration. The object is to align with global best practices, focusing on ESG factors and promoting women’s entrepreneurship. “Our goal is to inspire and support an increasing number of entrepreneurs on their journey,” Rai has declared.
According to the DPIIT, in all 33 states and UTs participated in the exercise ranked under five categories — best performers, top performers, leaders, aspiring leaders and emerging start-up ecosystems.
The Start-up India initiative was launched by Prime Minister Narendra Modi on 16 January 2016 to build a strong ecosystem for nurturing innovation, boosting start-ups, and encouraging investments in the start-up ecosystem of the country. As of now, over 117,000 start-ups are recognized by the government. All the recognized ones are eligible to seek certain tax incentives. Incidentally, Maharashtra has the highest number of start-ups in the country. While India has over 72000 such units, more than 13000 are in Maharashtra alone.
Overall, Gujarat has been ranked the best performer for the fourth time in a row. Karnataka has been ranked in this segment for the second consecutive year. Eight states are categorised as ‘leader.’ They are : Andhra Pradesh, Assam, Madhya Pradesh, Uttar Pradesh, Uttarakhand, Goa, Manipur, and Tripura. States and UTs in the ‘aspiring leaders’ category include Bihar, Haryana, Andaman & Nicobar Islands and Nagaland. States under ‘the emerging start-up ecosystems’ category include Chhattisgarh, Delhi, Jammu & Kashmir, Chandigarh, Dadra & Nagar Haveli and Daman & Diu, Ladakh, Mizoram, Puducherry and Sikkim. They are evaluated across 25 action points, ranging from institutional support, fostering innovation, access to market, incubation and funding support.
In the year 2023, Maharashtra attracted the highest FDI by attracting investments worth $14.8 billion. The other states were : Karnataka – $10.4 billion, Delhi – $7.5 billion, Gujarat – $4.7 billion, Haryana – $2.6 billion, Tamil Nadu – $2.1 billion and Telangana – $1.3 billion.
Maharashtra chief minister Eknath Shinde is hopeful of attracting ‘value-adding industries,’ in the sectors including steel, information technology, nuclear energy, renewable energy, automotive, agro-industrial and agriculture. Accordingly, 20 Memoranda of Understanding are likely to be signed in these sectors. This is the second time that the Maharashtra delegation is participating in Davos under Shinde. Last year, investment agreements worth Rs.1.37 lakh crore were signed in this conference. Seventy-six percent of those contracts have materialised, the state government says. This year, Shinde expects to sign MoUs worth Rs.3 lakh crore.
Maharashtra needs to stand up firmly to compete with other states, whose rate of growth is faster though their volume is smaller, compared with the state. The economy of Maharashtra is far larger than any other state. The infrastructure investment in the state is huge, too. Still, there is no room for complacency. Therefore, political differences must not override professional and developmental priorities. That is the only way to keep Maharashtra ahead of all others.
A Column By
Dilip Chaware – Senior Editor
A media professional for 43 years, with extensive experience of writing on
a variety of subjects; he is also a documentary producer and book author.
