September 16, 2015: The recent effort of the Government to evaluate States on 98 parameters in collaboration with World Bank for a National Ease of Doing Business Ranking can be seen as a key step to foster competitive as well as cooperative federalism. The move will also provide a fillip to business confidence and boost transparency
In my opinion, this is a significant stride and the scorecard must result in further streamlining of the State-level regulatory business burden. Collaboration in order to learn from experience of other States must emerge as the spirit of this exercise.
It is encouraging to note that some States, despite an overall low ranking, have excelled in certain spheres, indicating the prevalence of several good practices. The following 5 specific practices have been leveraged by specific States to excel in reforming business practices:
- MP and Gujarat stand out with ‘Land Records and land allotment procedures’
- MP and Gujarat have published details on the available land banks in the state.
- The availability is supplemented with detailed land allotment procedures.
- Gujarat has also implemented a robust GIS system providing details with regards land earmarked for industrial use.
- Investor friendly access to ‘infrastructure related utilities’ in Maharashtra
- Maharashtra provides access to utilities such as electricity, water and sewage in a time bound manner. Detailed procedures and all inclusive checklists have been placed on the relevant websites to keep investors informed.
- The state has also implemented online systems to apply for the utilities thereby allowing an investor to apply from anywhere anytime.
- On this parameter, Maharashtra scored 88.89% with the next best State i.e Gujarat scoring a significantly lower 75%
- ‘Corporatization’ of Punjab’s Bureau of Investment Promotion
- The Punjab Bureau of Investment Promotion has created a one-stop system for various State level regulatory and fiscal incentive approvals.
- The Bureau is headed by a CEO entrusted with the power to grant approvals along with officers vested with powers of respective regulatory departments.
- The Bureau processes applications received through the Invest Punjab website and keeps investors updated about various project initiation stages.
- While Punjab ranks 16 in overall ranking, it outrivals other States with the highest rank in ‘Setting up a Business’ category.
- Jharkhand’s online compliance with labour regulations
- Jharkhand achieves a 100% score in this category. The State’s Department of Labour has implemented a comprehensive online workflow based portal facilitating speedy approvals & clearances for entrepreneurs.
- The portal offers many functionalities - online registration, licensing, renewal under various Labour Acts, computerized allocation of inspectors etc.
- It also allows provision of Self-Certification for renewal and returns & mandated a single joint inspection in 5 years for compliance with the 14 Labour Laws.
- Karnataka’s ‘Not so taxing’ tax procedures
- All services including registration for various taxes, filing returns, paying taxes through payment gateway, receiving registration certificates (which are downloadable and verifiable), e-waybill registrations are provided through electronic mode only thereby eliminating the need for any physical touch point.
- The online portal provides clear information on procedures.
- A helpline has also been established to assist dealers with e-filing of returns.
The ranking of States on parameters of Business Reforms is a first of its kind in the country. This will provide granularity to India’s global ranking on Ease of Doing Business. It is critical that this magnanimous knowledge-driven effort helps each State to identify ‘focus-areas’ for reforms, here on. A fair commitment to these reforms, along with timely monitoring and evaluation at the State-level, will unleash positive economic spill-over for the entire economy.