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Bihar and Ladakh continued to perform poorly, while Gujarat and Karnataka topped in an index that ranks states and Union Territories on their ecosystems for new startups, said the department for the promotion of industry and internal trade (DPIIT).

Kerala, Maharashtra, Odisha and Telangana were adjudged “top performers" because of initiatives taken to develop startup ecosystems for promoting entrepreneurs, while Jammu & Kashmir emerged as the “top performer" among Union territories and northeastern states.

Gujarat came out best for the third year running.

“States need to bring consistency in rules, and that will help boost the investment climate. These rankings are just a reflection of what states can do to get more investment. Each state has its own challenges, but the stability of rules is crucial," said Upasna Bhardwaj, an economist at Kotak Mahindra Bank.

“Besides, states need to be able to provide land and labour. They must effectively enforce labour rights and provide securities."

The DPIIT index included Chhattisgarh, Delhi, Madhya Pradesh, Rajasthan, Chandigarh, Puducherry and Nagaland in the “aspiring leaders" category.

The “emerging startup ecosystems" category comprised Andhra Pradesh, Bihar, Mizoram and Ladakh.

The commerce and industry ministry said the states were evaluated across seven reform areas consisting of 26 action points, ranging from institutional support, fostering innovation, access to market and incubation to funding support.

DPIIT secretary Anurag Jain said the exercise plays a crucial role in easing the business environment for startups. Commerce minister Piyush Goyal asked stakeholders to aspire to become the number one startup ecosystem in the world.

Goyal said that ONDC (Open Network for Digital Commerce), a government initiative, had the power to spawn thousands of startups.

“The huge success that UPI (Unified Payment Interface) has been in India, which has democratized the payment system in India... in the next five years, we will have ONDC democratize e-commerce across India. So much so that we will have a few thousand startups, maybe more, and a few hundred unicorns. Rather than three companies being 100 billion or one trillion in size, you will have a thousand companies each of a billion dollars. That is what ONDC has the power to do," Goyal said.

The minister said neighbouring states could align so as to learn from each other. He asked the department to get more startups on the Government E-Marketplace (GeM), saying even services had been brought under GeM.

He further asked startups to come up with solutions for Indian fishermen in areas like providing them with safety or GPS systems to prevent them from entering the waters of Pakistan and Sri Lanka.

Experts said states like Bihar need to introduce more reforms to boost their rankings. Bihar has consistently fared badly in the rankings for ease of doing business.

According to the Centre for Monitoring the Indian Economy, unemployment in Bihar in July stood at 14%, nearly double the national unemployment.

Bihar had also featured in the “emerging business ecosystems" in the lowest category. States were assessed on their performance in the implementation of the Business Reforms Action Plan (BRAP) initiated by the commerce ministry.

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