Lok Sabha Question No. 786 (UNSTARRED), answered on 2016-11-21
Subject: Investment Climate in the Country
Ministry: COMMERCE AND INDUSTRY
Asked by: ANOOP MISHRA, HEMANT TUKARAM GODSE

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION

## LOK SABHA

## UNSTARRED QUESTION NO. 786. TO BE ANSWERED ON MONDAY, THE 21 ST  NOVEMBER,  2016.

## INVESTMENT CLIMATE IN THE COUNTRY

## 786.   SHRI ANOOP MISHRA: SHRI GODSE HEMANT TUKARAM:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

## वाणिज् यवव द्यग ं ्री

- (a) whether the regulatory framework in the country is a challenge to the creation of an environment conducive for investment;
- (b) if  so,  whether  the  Government  proposes  to  assess  the  investment  climate  and business regulations in different States;
- (c) if so, the details thereof;
- (d) whether the National Manufacturing Policy is taking care of such hurdles; and
- (e) if so, the details thereof?

## ANSWER

## वाणिज् यवव द्यग ााज् यं ्रीस् वतं ््रभााा(स्रींतंरीिरंमलााीरीतंाांि( THE MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF COMMERCE & INDUSTRY (SHRIMATI NIRMALA SITHARAMAN)

- (a) to (c): The  Government  of  India  has  taken  up  a  series  of  measures  to  increase transparency and improve the efficiency and effectiveness of various government regulatory functions and services for business in India. States too have been brought on board in the process to expand the coverage of these efforts.

A 98-Point Action Plan for improving the regulatory framework for business as part  of  easing  doing  business  in  the  country  was  finalized  at  the  National Workshop  of  'Make  in  India'  held  on  29 th December  2014.  Within  this,  a structured  questionnaire  (285  questions  across  8  Ease  of  Doing  Business Parameters) for ascertaining status of existing policy and procedures impacting  setting  up  of  industries/business  as  per  the  98-Point  Action  Plan was shared by DIPP with the States in April 2015.

In  October,  2015  a  340-Point  Business  Reform  Action  Plan  for  States  and Union Territories (UTs) was circulated by DIPP to all State/UT Governments for further implementation.

These recommendations are spread across 10 broad parameters - access to information and transparency enablers; single window; environmental registration enablers;  obtaining  electricity  connection;  availability  of land; construction  permit  enablers;  inspection  reform  enablers;  labour  regulation enablers; online tax return filing; and commercial dispute resolution enablers.

The  ranking  of  states  on  implementation  of  reforms  was  released  on  31 st October, 2016. The press release along with details on the reforms undertaken by various State Governments and Union Territories is annexed.

Reforms that have been implemented by states can be viewed on the online portal i.e. http://eodb.dipp.gov.in/in.

- (d) & (e): National Manufacturing Policy address some issues These include simplification  of  environment  clearances;  making  clearances  web-enabled; simplification of forms related to ease of doing business; registers and returns; labour reforms etc.

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## ASSESSMENT OF STATE IMPLEMENTATION OF BUSINESS REFORMS 2016

The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, in partnership with the World Bank Group, is pleased to release the results of the Assessment of State Implementation of Business Reforms 2015-16. The Assessment studies the extent to which states have implemented DIPP's 340point Business Reform Action Plan (BRAP) for States/UTs 2015-16, covering the period July 1, 2015 to June 30, 2016. The BRAP includes recommendations for reforms on 58 regulatory processes, policies, practices or procedures spread across 10 reform areas spanning the lifecycle of a typical business.

Data for this assessment was collected from State Governments on the BRAP portal. The portal, among the first of its kind globally, allowed State Governments to submit evidence of implemented reforms. At least 32 State  and  UT  Governments  submitted  evidence  of  implementation  of  7,124  reforms .  These  submissions were  reviewed  by  the  World  Bank  team  and  validated  by  DIPP's  team  to  study  whether  they  met  the objectives  of  the  BRAP.  The  portal  allowed  for  collaborative  dialogue  between  DIPP  and  the  State Governments in finalizing the evidence submitted. A total of 6,069 reforms were approved as implemented or not applicable on the portal.

The results of the assessment demonstrate that States have increasingly risen to addressing the challenge of making it easier to do business. The national implementation average stands at 48.93% , significantly higher than last year's national average of 32%. This demonstrates the great progress made by States this year.

The final rank of the States as of June 30, 2016 is shown in the table below.

|   2016 Rank | State            |   Score (%) |   2015 Rank |
|-------------|------------------|-------------|-------------|
|           1 | ANDHRA PRADESH   |       98.78 |           2 |
|           1 | TELANGANA        |       98.78 |          13 |
|           3 | GUJARAT          |       98.21 |           1 |
|           4 | CHHATTISGARH     |       97.32 |           4 |
|           5 | MADHYA PRADESH   |       97.01 |           5 |
|           6 | HARYANA          |       96.95 |          14 |
|           7 | JHARKHAND        |       96.57 |           3 |
|           8 | RAJASTHAN        |       96.43 |           6 |
|           9 | UTTARAKHAND      |       96.13 |          23 |
|          10 | MAHARASHTRA      |       92.86 |           8 |
|          11 | ODISHA           |       92.73 |           7 |
|          12 | PUNJAB           |       91.07 |          16 |
|          13 | KARNATAKA        |       88.39 |           9 |
|          14 | UTTAR PRADESH    |       84.52 |          10 |
|          15 | WEST BENGAL      |       84.23 |          11 |
|          16 | BIHAR            |       75.82 |          21 |
|          17 | HIMACHAL PRADESH |       65.48 |          17 |
|          18 | TAMIL NADU       |       62.8  |          12 |
|          19 | DELHI            |       47.62 |          15 |
|          20 | KERALA           |       26.97 |          18 |
|          21 | GOA              |       18.15 |          19 |
|          22 | TRIPURA          |       16.67 |          26 |

|   2016 Rank | State                     |   Score (%) | 2015 Rank   |
|-------------|---------------------------|-------------|-------------|
|          23 | DAMAN & DIU               |       14.58 | -           |
|          24 | ASSAM                     |       14.29 | 22          |
|          25 | DADRA& NAGAR HAVELI       |        1.79 | -           |
|          26 | PUDUCHERRY                |        1.49 | 20          |
|          26 | NAGALAND                  |        1.49 | 31          |
|          28 | MANIPUR                   |        1.19 | -           |
|          29 | MIZORAM                   |        0.89 | 28          |
|          30 | SIKKIM                    |        0.6  | 27          |
|          31 | ARUNACHAL PRADESH         |        0.3  | 32          |
|          31 | JAMMU& KASHMIR            |        0.3  | 29          |
|          31 | CHANDIGARH                |        0.3  | 24          |
|          31 | MEGHALAYA                 |        0.3  | 30          |
|          31 | ANDAMAN & NICOBAR ISLANDS |        0.3  | 25          |
|          31 | LAKSHADWEEP               |        0.3  | -           |

Based on implementation of reforms, States have been divided into four categories, as below

| Category                       | States                                                                                                                                                                                                                 |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Leaders (90-100%)              | Andhra Pradesh, Telangana, Gujarat, Chhattisgarh, Madhya Pradesh, Haryana, Jharkhand, Rajasthan, Uttarakhand, Maharashtra, Odisha, Punjab                                                                              |
| Aspiring Leaders (70-90%)      | Karnataka, Uttar Pradesh, West Bengal and Bihar                                                                                                                                                                        |
| Acceleration Required (40-70%) | Himachal Pradesh, Tamil Nadu and Delhi                                                                                                                                                                                 |
| Jump Start Needed (0-40%)      | Kerala, Goa, Tripura, Daman & Diu, Assam, Dadra & Nagar Haveli, Puducherry, Nagaland, Manipur, Mizoram, Sikkim, Arunachal Pradesh, Jammu & Kashmir, Chandigarh, Meghalaya, Andaman & Nicobar Islands, and Lakshadweep. |

The highlight of the implemented reforms during this period is as follows:

- Single Window Systems: Various States have created a dedicated body/bureau as a one-stop system for State  level  regulatory  and  fiscal  incentive  approvals.  The  online  single  window  system  has  a  provision  for filing applications, payment, status tracking, online scrutiny and approval of applications. The officials of the Body/Bureau have also been given powers to grant approvals.
- o States  include: Andhra  Pradesh,  Chhattisgarh,  Gujarat,  Haryana,  Jharkhand,  Madhya  Pradesh, Maharashtra, Punjab, Rajasthan, Telangana, Uttarakhand
- Tax reforms: States have made good progress in tax reforms. These include mandating e-registration for Value Added Tax (VAT), Central Sales Tax (CST), Professional Tax, Entry tax, etc, allowing online payment and return filing; providing e-filing support through service centers and helpline and risk-based tax compliance inspections.
- o States  include: Bihar,  Chhattisgarh,  Gujarat,  Karnataka,  Madhya  Pradesh,  Maharashtra,  Odisha, Punjab, Rajasthan, Uttar Pradesh, Uttarakhand, West Bengal
- Construction permits: Many States have allowed applicants to apply online and upload building plans for automated construction permit approval. In addition, several states have developed AutoCAD-based systems that automatically scan building plans and monitor compliance with the building bye-laws and building codes in force.
- o States  include :  Andhra  Pradesh,  Chhattisgarh,  Gujarat,  Haryana,  Madhya  Pradesh,  Maharashtra, Rajasthan, Telangana, Uttrakhand
- Environment and labour reforms : States have also implemented advanced automated solutions to deal with environmental and pollution related applications and approvals. These solutions provides hassle free, 24 X  7  e-access  to  businesses  to  apply  online,  track  applications,  file  returns  and  statements  and  get  online permissions under various Acts and regulations. o States  include :  Andhra  Pradesh,  Bihar,  Chhattisgarh,  Gujarat,  Haryana,  Jharkhand,  Karnataka, Madhya  Pradesh,  Maharashtra,  Odisha,  Punjab,  Rajasthan,  Tamil  Nadu,  Telangana,  Uttar  Pradesh, Uttarakhand, West Bengal · Inspection Reforms : A number of inspection reforms with regard to labour, tax and environment related compliances have been introduced across the States to help businesses comply with inspection requirements in  a  user-friendly  manner.  To  bring  in  transparency,  the  states  have  also  published  comprehensive procedures  and  checklist  for  various  inspections  and  have  implemented  online  systems  for  allocation  of inspectors to increase efficiency and effectiveness of the procedure. o States  include: Andhra  Pradesh,  Chhattisgarh,  Gujarat,  Haryana,    Jharkhand,  Karnataka,  Madhya Pradesh, Odisha, Punjab, Rajasthan, Punjab, Telangana, Uttar Pradesh, Uttarakhand · Commercial disputes and paper-less courts : There has been significant progress this year in the area of judicial  reforms  compared  to  last  year,  particularly  due  to  the  passage  of  the  Commercial  Courts, Commercial Divisions and Commercial Appellate Divisions Act. To address the concern of time and costs associated with various legal processes, District Courts in various states have also made the provision of making online  payments, e-filing  and  e-summons.  Few  States  have  also  filled  up  vacancies  in  District Courts/commercial courts to ensure availability of adequate capacity for dealing with various cases. o States  include :  Andhra  Pradesh,  Chhattisgarh,  Gujarat,  Haryana,  Jharkhand,  Madhya  Pradesh, Maharashtra, Rajasthan, Telangana However, the present evaluation also highlights the need to properly communicate, monitor and  evaluate these reforms to ensure that their impact is being felt on the ground. A detailed report will be published in November. All data is publicly available at http://eodb.dipp.gov.in.

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