A new Government of India report has regretted that just about 20% of enterprises that started operations after Narendra Modi took over as India’s Prime Minister in 2014 have used the “single window system”, set up by different states to get all types of clearances, ranging from land and environment, to labour and power, to set-up their business.
Worse, the just-released report adds, only 41% of the experts interviewed admitted they were aware of the “process” of single window system, commenting, on the whole, the “awareness among the enterprises” about it was found to be “low, pointing to either incomplete implementation or insufficient awareness of the process.”
Calling single window system to “part of the checklist of 98 reforms agreed upon by state governments” under Modi’s ambitious Make in India initiative, the report says that its process “mandates that all approvals required by an enterprise to set up a business be routed under one common application window.”
Pointing towards variation in awareness about single window across states, ranging from 41% enterprises in Andhra Pradesh, 33% in Rajasthan, and 32% in Gujarat, to just about 9% in Maharashtra, the report says, interestingly, far more number of enterprises, about 64%, and 74% experts said they knew about the different environment categories for which clearances to begin a new enterprise are to be obtained.
Titled “Ease of Doing Business: An Enterprise Survey of Indian States”, the report is based on a survey of 3,326 manufacturing enterprises, five experts each from the 15 largest states in terms of number of enterprises, and 25 industry associations from the 19 largest states. It has been jointly prepared by Niti Aayog and Infrastructure Development Finance Company (IDFC), Mumbai.
The report finds that that 50% of the medium-sized enterprises have taken up to 120 days to set up a business, though at the “upper end”, it enterprises have taken close to 240 days. “The average (i.e., mean) time taken to set up a business in India was 118 days with a wide variation across states”, it adds.
“It took, on average, 63 days to set up a business in Tamil Nadu and 67 days in Andhra Pradesh whereas for Kerala and Assam, firms took 214 days and 248 days respectively” the report says, adding, “The top 25% of took between 150 and 320 days for getting land allotted from the government.”
“The average time taken to get all construction related approvals was around 75 days. Firms reported longest time taken in Karnataka (140 days), Uttarakhand (136 days), and Kerala (135 days) and the shortest time taken in Himachal Pradesh (8 days)”, the report says.
As for environment related approvals and renewals ranges, the report says, it “takes on average 91 days for getting environmental clearances and on average 71 days for renewing these clearances”, with Uttar Pradesh and Kerala on an average taking 121 days, while 25 days in Chhattisgarh.
The report comments, “According to the World Bank’s 2017 Doing Business report, the time taken for getting construction permits was 190 days”, with India ranking “poorly (185 out of 187 countries) in this area”, adding, “It appears that the actual experience of enterprises is better than the survey results of the World Bank.”
The report claims that, in the period after Modi came to power, 38% of the enterprises believed that the regulatory environment for setting up a business had improved, another 38% said it had stayed the same while 21% said it had worsened.
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