Monday, July 23, 2018
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Unsettled scores
ease of doing business

Unsettled scores

Haryana's top rank among its neighbours may partially be attributed to its proximity to New Delhi. But, the exceptional performance of Himachal Pradesh and Jammu & Kashmir leaves no chance for Punjab to find any scapegoat, says Vijay C Roy23 Jul 2018 | 12:42 AM

This is an example of the so-called single window in Punjab, which ultimately turned out to be a false one.

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This is an example of the so-called single window in Punjab, which ultimately turned out to be a false one. Couple of years ago, a leading IT firm had proposed to invest in Punjab. It had duly submitted its plan to the Punjab Bureau of Investment Promotion (PBIP) for setting up a facility in Mohali. The bureau, apparently a single-point contact for the investors, sat on the file for months before asking the company to submit its building plan to the local authority - Greater Mohali Area Development Authority (GMADA). 

As a result of perception like this, the state slipped eight notches to the 20th rank on the latest ease of doing business. Although the latest survey also clubs Delhi, Goa, Kerala and Jammu and Kashmir as reform laggards, Punjab scored 53.92 per cent compared to Haryana's over 98 per cent and Himachal Pradesh's 88 per cent.

The state government needs to pull up its socks to arrest the freefall. It will be not able to win the investor's confidence by merely blaming the previous regime. According to the latest report, while Punjab has already implemented 201 reforms, actions on 166 agenda were urgently required. 

The state has fared poorly in areas such as single-window clearance, availability of land, environmental registration, information access and transparency.

Industry is, however, positive about the growth prospect of the state because it has enormous potential. "The state has a great work culture and a highly productive workforce. However, the non-implementation of single window is the single-most prominent reason behind its poor ranking. Other impediments are unavailability of land and lack of air connectivity," says Confederation of Indian Industry President Rakesh Bharti Mittal. Punjab has already missed the IT bus. It can, however, focus on healthcare, education and food processing, he adds. 

Although the state has prepared a roadmap to improve its ranking, it is far behind Haryana. It is, therefore, important that Punjab learns from its neighbour instead of reinventing the wheel. 

Haryana has rightfully secured its position among the top three investor-friendly states of India in about three years despite hooliganism the state had witnessed during the Jat agitations. The state's journey from the 14th position in 2015 to the third rank in the latest ease of doing business is based on significant reforms. The state has scored an overall 98.07 per cent, much ahead of its neighbours. "Our continuous efforts in achieving a top position are testimony of our commitment to provide a conducive business environment to growth," says Haryana Industry Minister Vipul Goel.

The minister gives credit to the single-window system and time-bound clearances for this feat, which is done through the Haryana Enterprise Promotion Centre (HEPC). The single-roof facility is part of the state's ongoing efforts to adopt a revolutionary mechanism to help simplify procedures and facilitate ease in doing business. Under this initiative, more than 70 clearances of 14 different departments are being granted though a single window in a time-bound manner, he says.

Till now, the HEPC has received 16,317 applications on common application forms with investment worth Rs 3,00,000 crore and a potential employment for around 12,00,000 people. "The government has put in place a strong monitoring mechanism to track progress of MoU implementation.Of the 359 MoUs signed during the 'Happening Haryana' event held in March 2016, 173 have already been implemented in which Rs 14,314 crore of investments have been grounded with employment having been given to 25,923 persons and remaining are under various stages of implementation," he says.

Haryana improved its own performance by learning from the mistakes of its neighbours. "As a first step, we planned to learn from our peers, and analyse the best practices adopted by other states. Our plan this year is to increase the outreach of the reforms undertaken by the state and to ensure that every investor is aware of the continuous regulations relaxations. We have a major focus on strengthening the HEPC by adding more state industrial services under its ambit and increasing its reach at the block level," a government official says.

The state's next strategy is to increase the investor outreach and implementation of industrialists’feedback in policy decisions. 

Although Himachal Pradesh has moved up one notch in the ease of doing business ranking and improved its score; it continues to lag far behind neighbouring Haryana. Key problem areas include lack of regulatory of reforms towards the single-window clearance system, scarce land resources, environmental clearances, access to information and transparency. Tedious and tardy clearances have brought down the score considerably. 

Principal Secretary-Industries RD Dhiman, however, says that the state's performance is not bad compared to its previous year's score. About 18 points pertaining to revenue, urban development and home departments fetched it the 16th position, even as it had scored well on other parameters. Commenting on the low score for the single-window clearance he says, there were some hiccups in the online portal which have been rectified. He expects a higher score in the next year.

Jammu and Kashmir's improved status in the ranking of ease of doing business is worthy of praise. It has positioned itself on the 22nd rank. Its previous ranking was 32. The state is yet to feature among the top 20 states along with other hill states such as Uttarakhand and Himachal Pradesh. Its immediate neighbour, Himachal Pradesh stands at number 16. A hill state with almost similar geographical features as Jammu &  Kashmir, Uttarakhand has showed an impressive ranking of 11.

On the combined scorecard of reform evidence and feedback, J&K has achieved 33 per cent. On the top five reform evidence score (area wise), the state fared poorly on areas such as single window, availability of land and environmental registration enablers. Out of the total reforms, the state has implemented only 128. The state is yet to implement 223 reforms.

The ease of doing business survey ranks states and union territories on the basis of their performance on 372 parameters. The ranking is a testimony of investor-friendliness of a state. States are judged on the basis of actual implementation of reforms in various areas, including registration of property, availability of land, allotment of land, regulatory approvals through the single window and access to information. The surveyors give due weightage to industry feedback while preparing the scorecard. The purpose of the ranking is to highlight impediments to the authorities and prompt them to improve them.

— With inputs from Sushil Manav (Chandigarh) and Ambika Sharma (Solan)

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