Vijayawada: In what could dent the image of Andhra Pradesh as a business-friendly destination, a research study by the National Council for Applied Economic Research (NCAER) says that industrialists in the state believe that the prevailing political atmosphere, labour conditions and available infrastructure are not conducive for expanding business operations.
As many as 60 per cent of the respondents, who participated in the survey, said they did not want to expand their business in the state in the next five years.
According to 51 per cent of the respondents, the situation would not improve in the next six months. However, the rest were more optimistic about improvement in atmosphere.
Notably, a majority of the respondents complained about rampant corruption in government. The survey categorised government-related problems, including corruption, as severe.
More than 74.3 per cent of respondents said corruption was deep-rooted in the state while 17.1 per cent felt it is `moderate'.
Interestingly, the NCAER report goes contrary to the ease of doing business ranks announced by the Centre on Monday.
However, tax policies in AP were lauded by industrialists. More than 91 per cent of industrialists said AP was the best destination for investments because of favourable land acquisition policy.
The report analysed business and economic trends across the country two days ago. It said the state investment potential index (N-SIPI) addresses informational asymmetries among different states, by giving each state a single composite investment score, that gives a comprehensive measure of how the 21 states and one Union territory are positioned to attract investments.
While N-SIPI does not measure streamlining of regulatory procedures and business reforms, it perfectly complements the recent World Bank and department of investment promotion and policy (DIPP) ranking of states, on how they fared on a 98-point action plan for business reforms.
"N-SIPI is an evidence-based index that is built around five main pillars and 51 subindicators, which were identified after several rounds of brainstorming and discussions with industrialists, academicians, central and state government functionaries," said NCAER.
The five pillars of N-SIPI include labour, infrastructure, economic climate, political stability (including go vernance), and perceptions of good business climate. As the industry survey covered only 21states, this study gives two types of rankings.
The first is N-SIPI 21, which is the comprehensive ranking based on all five pillars, the remaining nine states are mentioned in the N-SIPI 30 where industry surveys have not been conducted.
This year's N-SIPI 21 ranks Gujarat, Delhi and Tamil Nadu as the top three destinations for medium-term investment. States that have a significant amount of catching up to do include Bihar, Uttar Pradesh and Jharkhand.
At a more disaggregated level, there is a significant variation among states.In the economic climate pillar, Delhi tops the list, closely followed by Andhra Pradesh and Maharashtra. Gujarat tops in two pillars political stability and perception of good business climate.
AP stood ninth in labour issues, 14th in infrastructure and 11th in political stability.However, AP ranked fourth in overall performance considering all five pillars. AP is ranked second in economy climate pillar. AP earned a poor 19th rank in perception of business climate.
Source: TOI
