Gujarat No 1 in ease of doing business? Thank 'environmental compliance'

By Rajiv Shah
A Government of India report, supported by World Bank, consultants KPMG, and two top industry bodies, Confederation of Indian Industries (CII) and Federation of Indian Chamber of Commerce and Industry (FICCI), has placed Gujarat No 1 for “ease of doing business”, but point out, this has been possible because of cent per cent compliance to environmental laws, an area in which it is most suspected by environmentalists.
The report’s revelation comes amidst sharp criticism by top environmental experts of the Gujarat government’s “complete failure” to ensure that industries comply with environmental norms. Only two years ago, the Central Pollution Control Board had found two of the industrial centres in Gujarat, Vapi and Ankaleshwar, as topping the list of most polluting clusters.
Setting aside these concerns, the report, interestingly, is more points to how quickly environment procedures are followed in Gujarat. It says Gujarat is the only state which has implemented the online “consent management system”, achieving 100 per cent score on this score. The compliance in Gujarat, it adds, is very high for handling air, water and hazardous waste pollution.
The report, in fact, praises the Gujarat Pollution Control Board for adopting “a web based application called eXtended Green Node (XGN) to provide an IT solution for effective implementation of various pollution control board clearances/procedures”.
It says, “XGN provides hassle free, 24 X 7 anywhere e-access to businesses to apply online, track application approvals, file returns and statements and getting online permissions under various Acts and rules. obtain the online permissions from GPCB.”
The other two parameters for which Gujarat has been found to be particularly doing well are land allocation and implementation of labour laws. Titled “Assessment of State Implementation of Business Reforms”, the report is the outcome of Prime Minister Narendra Modi asking the World Bank Group to “support” India’s efforts to enhance India’s competitiveness and increase manufactured exports.

A World Bank source says, the report “captures the findings of an assessment of reform implementation by states led by the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, Government of India”.
It comes close on the heels of World Bank ranking Gujarat 142 among 189 countries in its assessment of ease of doing business. The ranking has gone down by two in a year; it was 140 in 2014. Onno Ruhl, World Bank country director, who released the report, says, “The stark reality is that India remains a difficult place to do business. A disproportionately high regulatory burden is borne by businesses in India today.”
Despite ranking No 1, the report does not believe that Gujarat is a leader. It says, “States with an overall implementation status of 75 per cent and above” would be leaders, but at 71.14 per cent Gujarat is still a little away.

Gujarat is still an “aspiring leader”, the report states, pointing out that it in the company of six other states – Andhra Pradesh, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha and Rajasthan.
Notwithstanding Gujarat being No 1 in ease of doing business, as for “setting up business”, the report finds several states topping the list, but not Gujarat. Setting up business criteria include establishing an effective single window system, availability of information on regulatory compliance requirements, and similar such procedures.
The report comments, “Remarkably, Punjab is the only state in which the single window system allows application for all of the licenses studied in this assessment, although some others come very close. The box below examines how Punjab has achieved this.”
Other states which have “converted” their single window system into truly effective online portals” are Andhra Pradesh, Madhya Pradesh, Maharashtra, Telangana and Uttar Pradesh, the report points out.

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