Lok Sabha Question No. 2213 (UNSTARRED), answered on 2020-03-04
Subject: EODB Survey in States
Ministry: COMMERCE AND INDUSTRY
Asked by: A. Chellakumar, Chandra Prakash Joshi

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

## UNSTARRED QUESTION NO. 2213.

TO BE ANSWERED ON WEDNESDAY, THE 04 TH  MARCH, 2020.

## EODB SURVEY IN STATES

## 2213.  DR. A. CHALLAKUMAR:

## SHRI CHANDRA PRAKASH JOSHI:

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

वाणिज्य

## एवं उद्योग मंत्री

- (a) the  Country's  present  ranking  in  'Ease  of  Doing  Business'  (EODB)  in  the world;
- (b) whether  the  Government has  initiated  an  extensive  EODB  survey  in  States with an objective to improve the business climate and if so, the details thereof;
- (c) whether  online  single  window  has  been  launched  at  the  Central  and  State levels so as to simplify the business regulation and if so, the details thereof; and
- (d) the  measures  taken/proposed  to  be  taken  by  the  Government  to  boost business  regulatory  environment  in  the  Country  and  improve  Country's ranking in the EODB?

## ANSWER वाणिज ् य एवं उद्योग मंत्री श्री पीयूष गोयल THE MINISTER OF COMMERCE & INDUSTRY

## ( ) (SHRI  PIYUSH GOYAL)

- (a): In the latest Doing Business Report (DBR), 2020 released by the World Bank on 24 th October, 2019, India stands at 63 rd position out of 190 countries. Since 2014, India's rank has gone up from 142 to 63 in 2019.
- (b): Yes Sir, the Department for Promotion of Industry and Internal Trade (DPIIT) started a comprehensive reform exercise, State Reform Action Plan, in States and  Union  Territories  (UTs)  in  December,  2014.  The  details  are  given  in Annexure-A.
- (c): The  State  Reforms  Action  Plan  prepared  by  Department  for  Promotion  of Industry and Internal Trade (DPIIT) requires States and UTs to have a Single Window System across various Departments with the following features:
- i. Allow online submission of application without the need to submit physical copies of the application.
- ii. Eliminate physical touch-point for document submission and verification.
- iii.   Allow applicant to track status of application online.
- iv.   Ensure the applicant receives an SMS/e-mail notification as and when the application  is  submitted  and/or  query  is  raised  and/or  application  is approved/rejected.
- v. Mandate that all queries/clarifications related to investors' application are sought in one go and within 7 days of receipt of the application.

Under  the  assessment  exercise  of  States/UTs  for  the  year  2017-18,  21 States/UTs have designed and implemented online Single Window System. Further,  the  States  Reform  Action  Plan,  2019  requires  States  and  UTs  to develop an online Information Wizard equipped with a feature to provide links to  online  application  forms  for  licenses/  NOCs  required  by  users  and  their relevant notifications. Under the reform area Construction Permits Enablers, States  and  UTs  are  required  to  mandate  timelines  for  grant  of  construction permits/NOCs and to provide these services the online single window system.

- (d): The details of reforms undertaken to improve business regulatory environment in  the  country  thereby  improving  India's  ranking  in  the  World  Bank's  Doing Business Report are given in Annexure-B.

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## ANNEXURE-A

## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PART  (b)  OF  LOK  SABHA UNSTARRED QUESTION NO. 2213 FOR  ANSWER ON 04.03.2020.

## Regulatory Reforms in States- State Reform Action Plan (SRAP)

The Department spearheaded a dynamic reform exercise that commenced in 2014 to  rank  all  the  States/UTs  in  the  country  based  on  implementation  of  designated reform  parameters.  The  aim  of  this  exercise  is  to  create  a  conducive  business environment by streamlining regulatory structures  and  creating  an  investor-friendly business climate.

A 98 point action plan was finalised and shared with States/UTs. Subsequently, a report  titled  'Assessment  of  State  implementation  of  Business  Reforms'  was released  in  September,  2015  capturing  the  findings  of  reforms  implemented  by States/UTs. World Bank also partnered with DPIIT in this reform plan and to give the exercise  momentum,  18  joint  workshops  were  conducted  along  with  World  Bank specialists  to  help  Departments  concerned  across  States/UTs  understand  the essence of the reforms better.

In  2016,  DPIIT  released  a 340-point action plan which was drafted in consultation with  all  States/UTs  which  included  recommendations  on  58  regulatory  processes, policies  and  process  spread  across  10  reform  areas  spanning  the  lifecycle  of  a typical business.

DPIIT took up policy measures like enacting the Public Service Delivery Guarantee Act  to  ensure  timely  processing,  setting  up  of  a  single  window  agency  through legislation  to  serve  as  a  single  point  of  contact  for  all  licensing  required  by businesses,  mandating  joint  inspection  under  10  labour  Acts,  etc.  Extensive  work was done to streamline inspections and best practices across 10 different countries were  studied  for  the  same.  DPIIT  also  developed  an  online  portal,  which  can  be accessed at http://eodb.dipp.gov.in, wherein all the reforms implemented by States/UTs are accessible for public viewing. The portal also gives dynamic ranking which updates, as and when, any of the reform points are recognized and approved.

Final ranking of States/UTs on implementation of the 340 points were released on 31 st October, 2016 with a national implementation average of 48.93%, significantly higher than national average of 32% in 2015.

The reform exercise in 2016 saw 12 States achieved more than 90% implementation score  and  some  noteworthy  achievements  include  16  States  implemented  online Single Window System with functionality for online application submission, payment and approvals, 15 States developed a GIS system to provide details about the land earmarked  for  industrial  use  across  the  State,  13  States/UTs  set  up  commercial courts at the district level, etc.

In  2017-18,  the  reform  exercise  was  updated  to  372  action  points  with  additions introduced  such  as  Central  Inspection  system,  Trade  License,  Registration  under

Legal Metrology, and Registration of Partnership Firms & Societies. DPIIT had taken numerous initiatives for the reform process as listed below:

-  A nationwide workshop was held on 29 th July, 2017 to discuss the relevance and importance of implementing reforms. The all-day conference witnessed an active involvement  of  almost  100  participants  from  26  States/UTs.  The  workshop witnessed sharing of the best practices by States/UTs
-  A  unique  handholding  method  was  introduced  where  leading  States  were partnered with laggard States/UTs. West Bengal merits a special mention for its effort for conducting a 3 day workshop for Nagaland
-  Priority  reforms  was  identified  for  North  east  States  and  others  with  low implementation score
-  8  workshops  were  conducted  along  with  the  World  Bank  to  address  queries posed by States/UTs in Tripura, Punjab, Haryana, Daman & Diu, Dadra Nagar Haveli, Andaman and Nicobar Islands, Goa and Karnataka
-  To handhold all the 8 north-eastern States, video conferences were arranged.

The assessment of Business Reform Action Plan, 2017-18 was released jointly by DPIIT and the World Bank on 10 th July, 2018. The respective position of the States is given in the table below.

| TOP ACHIEVERS (Above 95%)   | TOP ACHIEVERS (Above 95%)   | ACHIEVERS (90-95%)   | ACHIEVERS (90-95%)   | FAST MOVERS (80 - 90%)   | FAST MOVERS (80 - 90%)   | ASPIRERS (BELOW 80%)   | ASPIRERS (BELOW 80%)      |
|-----------------------------|-----------------------------|----------------------|----------------------|--------------------------|--------------------------|------------------------|---------------------------|
| Rank                        | State                       | Rank                 | State                | Rank                     | State                    | Rank                   | State                     |
| 1                           | ANDHRA PRADESH              | 10                   | WEST BENGAL          | 16                       | HIMACHAL PRADESH         | 19                     | GOA                       |
| 1                           | ANDHRA PRADESH              | 11                   | UTTARAKHAND          | 16                       | HIMACHAL PRADESH         | 19                     | GOA                       |
| 2                           | TELANGANA                   | 12                   | UTTAR PRADESH        | 17                       | ASSAM                    | 20                     | PUNJAB                    |
| 3                           | HARYANA                     | 13                   | MAHARASHTRA          | 18                       | BIHAR                    | 21                     | KERALA                    |
| 4                           | JHARKHAND                   | 14                   | ODISHA               |                          |                          | 22                     | JAMMU & KASHMIR           |
| 5                           | GUJARAT                     | 15                   | TAMIL NADU           |                          |                          | 23                     | DELHI                     |
| 6                           | CHHATTISGARH                |                      |                      |                          |                          | 24                     | DAMAN & DIU               |
| 7                           | MADHYA PRADESH              |                      |                      |                          |                          | 25 26                  | TRIPURA                   |
| 8                           | KARNATAKA                   |                      |                      |                          |                          |                        | DADRA & NAGAR HAVELI      |
| 9                           | RAJASTHAN                   |                      |                      |                          |                          | 27                     | PUDUCHERRY                |
|                             |                             |                      |                      |                          |                          | 28                     | NAGALAND                  |
|                             |                             |                      |                      |                          |                          | 29                     | CHANDIGARH                |
|                             |                             |                      |                      |                          |                          | 30                     | MIZORAM                   |
|                             |                             |                      |                      |                          |                          | 31                     | ANDAMAN & NICOBAR ISLANDS |
|                             |                             |                      |                      |                          |                          | 32                     | MANIPUR                   |
|                             |                             |                      |                      |                          |                          | 33                     | SIKKIM                    |
|                             |                             |                      |                      |                          |                          | 34                     | ARUNACHAL PRADESH         |
|                             |                             |                      |                      |                          |                          | 34                     | LAKSHADWEEP               |
|                             |                             |                      |                      |                          |                          | 34                     | MEGHALAYA                 |

Some important achievements under the exercise are as follows:-

-  19 States have designed an Information Wizard providing information for all approvals, licenses, registrations timelines, procedure to establish business/industrial unit (pre-establishment & pre-operation)
-  21 States/UTs have designed and implemented online Single Window System
-  16 States/UTs have stipulated Construction Permits to be provided within 45 days (Building plan approval to be provided in 30 days/ Plinth level inspection to  be  completed  in  7  days,  final  occupancy  certificate  provided  in  8  days). Telangana, Assam and Tamil Nadu have mandated even shorter timelines of 29, 30 and 37 days, respectively. Tamil Nadu has claimed to have done away with the process of issuance of completion certificate
-  21 States/UTs have implemented a GIS system to provide details about the land earmarked for industrial use across the State
-  23 States/UTs have reduced the number of documents required for Obtaining Electricity connection to only 2
-  18 States/UTs have brought all compliance inspections conducted by Labour, Factories,  Boilers  Departments  and  Pollution  Control  Boards  under  Central Inspection Framework
-  12 States/UTs have merged of the payment of court fees and process fees into a single transaction with some states like Jharkhand, Maharashtra, and Gujarat even repealing process fees from the Court Fees Act
-  29 States/ UTs have notified a list of white category industries exempted from taking pollution clearances.

New sector  specific  reforms  were  added  in  2017-18,  States/  UTs  have  shown  an active  participation,  with  20  States/UTs  implementing  an  online  application  system Wholesale Drug License and Retail Drug License (Pharmacy), 18 States/UTs have online  systems  for  Registration  of  Partnership  firms  and  Societies,  20  States/UTs have  implemented  an  online  system  for  registration  and  renewal  under  the  Legal Metrology Act, 2009.

An important addition to methodology under SRAP 2017-18 had been the inclusion of a feedback exercise wherein feedback was sought on 78 reform points from actual users.  The  respondent  data  was  provided  by  the  States/UTs  across  various categories viz. Architect/ lawyers/ new  and existing business and electrical contractors. The reform plan's implementation and evolution has been successful in inculcating among  States/UTs' aspiration to improve the business regulatory environment.

## State Reform Action Plan 2019-20

Assessment  under  SRAP  2019-20  is  based  only  on  the  feedback  received  from service users and industries. The draft Action Plan has been thoroughly revised and complied to include 80 points substantially derived from the 372 points SRAP 201718.  The  selection  of  action  points  was  done  considering  100  %  feedback  based scoring and comments received from States.

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## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PART  (d)  OF  LOK  SABHA UNSTARRED QUESTION NO. 2213 FOR ANSWER ON  04.03.2020.

Some of the major indicator wise  reforms undertaken by the Government towards easing the business environment in the country are as under:

## (a) Starting A Business:

-  Ministry  of  Corporate  Affairs  has  notified  a  new  Web  form  called  SPICe+ replacing  the  existing  SPICe  form.  SPICe+  would  offer  10  services  like Incorporation,  DIN allotment, mandatory issue of PAN and TAN, mandatory registration of EPFO  and  ESIC, mandatory issue of Profession Tax registration in case of companies being incorporated in Maharashtra, opening of Bank account of the company and allotment of GSTN.
-  Removing the requirements of company seal, minimum capital and obtaining certificate of commencement.
-  Incorporation  fee  has  been  eliminated  for  companies  with  authorized  share capital up to INR 15 lakh.
-  The  requirement  to issue a physical PAN  card  has  been  eliminated. Additionally, PAN and TAN are mentioned in the Certificate of Incorporation (CoI) which is considered as a sufficient proof for PAN and TAN.
-  Registrations  under  Mumbai  Shops  &  Establishments  Act  are  provided instantly  through  an  online  application  removing  requirement  of  physical inspection.

## (b) Dealing with Construction Permits:

-  Implementing an online system that has streamlined the process of obtaining building  permit  at  the  Municipality  of  New  Delhi  and  Municipality  of  Greater Mumbai  by  providing  a  single  window.  All  agencies  involved  in  granting clearance for construction have been integrated on the portal and applicant is no longer required to visit each agency individually.
-  Joint  Inspections  by  various  agencies  have  been  introduced  to  reduce multiple interaction by the applicant.
-  The new system has reduced number of procedures and time taken in grant of construction permit.

## (c) Getting Electricity:

-  The number of processes involved has been reduced by elimination of nonessential processes. This has also reduced the time taken for grant of a new electric connection.
-  The  number  of  documents  required  has  been  restricted  to  (i)  a  proof  of identity,  (ii)  a  proof  of  address/ownership/occupancy,  and  (iii)  for  artificial persons a proof of authority.
-  A  load  based  estimate  has  been  introduced  to  reduce  time  taken  in  this process.

## (d) Getting Credit :

-  Secured creditors are paid first during business liquidation, and hence have priority over other claims such as labor and tax.

## (e) Paying Taxes:

-  Payments for the contribution for EPFO and ESIC were made online.
-  Paying taxes has been made easier by replacing many indirect taxes with a single indirect tax, Goods and Service Tax (GST), for the entire country. The previous sales taxes including the central sales tax, CENVAT, state VAT and the service tax have been merged into the GST. Unification of these taxes will reduce the cascading effect of taxes and make taxes paid on inputs creditable to a higher percentage.
-  Corporate income tax has been reduced from 30% to 25% for companies with a turnover up to INR 250 crores
-  Administrative  charges  on  The  Employees'  Provident  Funds  Scheme,  1952 (EPFS)  have  been  reduced  in  March  2017  from  0.85%  to  0.65%  of  the monthly pay. The Employees' Deposit Linked Insurance (EDLI) administrative charges of 0.01% have been removed.

## (f) Trading Across Borders:

-  Time  and  cost  to  export  and  import  has  been  reduced  through  various initiatives,  including  the  implementation  of  electronic  sealing  of  containers, upgradation  of  port  infrastructure  and  allowing  electronic  submission  of supporting documents with digital signatures.
-  Enhancement of risk-based inspections for both imports and exports, whereby only about 5% of goods are physically inspected.
-  Adoption  of  the  Advance  Bill  of  Entry  which  allows  importers  to  start  the process of customs clearance before the arrival of the vessel.
-  Upgrading equipment on the NhavaSheva Port in Mumbai by adding 15 new Rubber Tyre Gantry Cranes. The Phase 1 of the Fourth Container Terminal at the  Jawaharlal  Nehru  Port  Trust,  with  an  additional  annual  capacity  of 2,400,000 TEUs, was completed in February 2018.
-  The new container terminal, Adani CMA Mundra Terminal Private Limited has been fully operational since June 2017, with an additional annual capacity of 1,300,000 TEUs.
-  Implemented in April 2018, e-Sanchit is an online application system, under the Single Window Interface for Trade (SWIFT) that allows traders to submit all supporting documents electronically with digital signatures.

## (g) Enforcing Contracts

-  The  Commercial  Courts  Act  2015  was  amended  to  reduce  the  pecuniary jurisdiction  of  commercial  courts  at  district  level  from  INR  1  crore  to  INR  3 lakhs.  75  courts  in  Delhi  and  16  courts  in  Mumbai  were  designated  as commercial courts.
-  Tools  for  e-Court  management  were  introduced  in  Delhi  and  Mumbai  to facilitate  greater control and transparency in the matter of court procedures. These tools were made available to judges and lawyers.

## (h) Resolving Insolvency

-  Introduction of the Insolvency & Bankruptcy Code, 2016 (IBC) has brought a paradigm shift in handling of corporate insolvency. The emphasis has been to ensure that instead of piecemeal sale of its asset, as viable unit is disposed of as a going-concern.
-  IBC  has  given  time  bound  procedure  for  disposal  of  corporate  insolvency thereby limiting possibility of delays in the process.

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