Andhra Pradesh and Telangana have jointly topped the ease of doing business ranking while Gujarat has slipped to the third position in the list prepared by the World Bank and DIPP.
Chhattisgarh, Madhya Pradesh and Haryana occupied the fourth, fifth and sixth slots, respectively in the index based on degree of implementation of DIPP's 340-point Business Reform Action Plan.
The Action Plan includes reforms on 58 regulatory processes, policies, practices, or procedures spread across 10 reform areas spanning the lifecycle of a typical business.
These are mainly single window clearance, tax reforms, labour and environment reforms, dispute resolution and construction permit.
In 2015 Index, Gujarat featured at the top, with Andhra Pradesh grabbing the second position and Telangana 13th.
As per the latest 2016 Index, those in the list of top 10 states in India providing a better climate for businesses include Jharkhand (7th), Rajasthan (8th), Uttarakhand (9th) and Maharashtra (10th).
Among other major states, Odisha occupied 11th slot, followed by Punjab, Karnataka, Uttar Pradesh, West Bengal and Bihar, Himachal Pradesh, Tamil Nadu and Delhi.
These rankings were provided in the report titled 'Assessment of State Implementation of Business Reforms 2016' which was prepared by World Bank in association with the Department of Industrial Policy and Promotion (DIPP).
The exercise is aimed at promoting competition among states with a view to improve business climate to attract domestic as well as foreign investments.
In the World Bank's latest 'Doing Business' report, India's place remained unchanged from last year's original ranking of 130 among the 190 economies that were assessed on various parameters. But the last year's ranking has been revised to 131 from which the country has improved its place by one spot.