Gujarat has emerged as the best performer in developing startup ecosystem for budding entrepreneurs, according to the ranking of states done by the department of industrial policy and promotion (DIPP).

Other top performers that followed the western state were Karantaka, Kerala, Odisha and Rajasthan.

"This exercise will help all the states to improve the ecosystem for promoting startups," DIPP Secretary Ramesh Abhishek said Thursday.

The rankings are based on the initiatives taken to develop startup ecosystem for promoting budding entrepreneurs.

A total of 27 states and three union territories participated in the exercise.

The ranking framework covers seven areas of intervention and 38 action points, including policy support, incubation centres, seed funding, angel and venture funding and easier regulations.

The government launched Startup India Action Plan in January to promote budding entrepreneurs in the country. The plan aims to give incentives such as tax holiday and inspector raj-free regime and capital gains tax exemption.