First ‘ease of doing business’ report, published by NITI Aayog, says only 41 percent of industry experts are even aware of this facility
Most start-ups don’t use single-window facility, which enables an enterprise to get all approvals from one common application window, reveals a NITI Aayog survey.
The single-window concept was part of the reforms under the ‘Make in India’ initiative in 2014. However, according to the first ‘Ease of Doing Business’ survey published by the NITI Aayog and IDFC Institute Monday, only 20 percent of the start-ups have availed this facility since 2014. Further, only 41 percent of the industry experts interviewed in the survey were aware of the facility.
The survey report released by law minister Ravi Shankar Prasad and industry and commerce minister Nirmala Sitharaman gauges the experience of about 3,200 manufacturing firms across states, using different parameters such as starting a business, labour regulations, legal issues and the time taken for getting permits.
Aimed at assessing the regulatory environment in states, the survey is being touted as the first to engage directly with industries and that too across the nation. India has been ranked 130 by a World Bank index on ease of doing business.
According to the report, labour-intensive sectors, which are crucial for job creation, are getting “more constrained” by labour-related regulations. Not only this, they face more power shortages and a longer time to get environmental approvals as compared with their capital-intensive counterparts. Setting up a business and land approvals also take longer for labour-intensive firms.
“They seem to face higher obstacles more generally that would seem to indicate… that there is de facto some kind of systematic bias in our system against labour industries,” said Rajiv Lall, MD and CEO, IDFC, while referring to the multiplicity of problems faced by labour-intensive industries.
Arvind Panagariya, vice-president, NITI Aayog said, “One thing that comes out very strongly is that when we ask the enterprises if they are aware of the single-window facilities, only about 20 percent of them say that they are aware. That is only 1/5th of the enterprises. Going forward, we need to communicate with enterprises a lot better.”
The report also highlights the irony that power intensive firms face “significantly higher” hours of power shortage as compared with non-power-intensive sectors. Not only this, on average it takes them over five more days to get an electricity connection. “It showed that these firms, which intensively used power to generate manufacturing output, are hobbled by factors, which are key to their growth,” said a NITI Aayog official.
Enterprises in high-growth states such as Bihar and Delhi face fewer regulatory hurdles as compared with those in low-growth states such as Andhra Pradesh and West Bengal. The report says this is evidence of the link between economic performance and better regulation.
“It is very important that we now have evidence that across the country…high-performing states, faster growing states clearly have a better business environment,” added Lall.