A report titled “Assessment of State Implementation of Business
Reforms” was released today. This report captures the findings of an
assessment of reform implementation by states, conducted jointly by the
Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce
& Industry, the World Bank Group and KPMG as the knowledge partner, the
Confederation of Indian Industry(CII) and the Federation of Indian Chambers of
Commerce and Industry (FICCI).
The assessment, the first of its kind, has been conducted
to take stock of reforms implemented by states in the period January 1 to June
30, 2015 based on the 98-point action plan for business reforms agreed between
DIPP and State and Union Territory governments on December 29, 2014.
According to the assessment, Andhra Pradesh,
Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Odisha and Rajasthan have
implemented over 50 percent of the 98 point action plan business reforms
studied in the assessment. Karnataka, Maharashtra and Uttar Pradesh are also among
the top 10 states in the assessment. No state has implemented 75 per cent or
more of the proposed reforms.
The assessment recognises the fact that most states
have already embarked on ambitious reform programs or expanded their ongoing
reform efforts since the announcement of the 98-point action plan. The
assessment has identified good practices on different parameters. For example:
Punjab leads in the area of “Setting up a Business”, as it features an online
single window system for registrations and licenses that cover most of the
regulatory services in the country. Andhra Pradesh and Chhattisgarh have also
made significant progress in this area. Maharashtra, followed by Gujarat and
Madhya Pradesh, were ranked highest in “Obtaining Infrastructure Related
Utilities,” with clearly defined timelines for electricity, water and sewage
connections, and a reformed electricity connection application process.
Similarly, Karnataka received the highest score on “Registering and Complying
with Tax Procedures.” Due to its comprehensive automation and process
reengineering efforts. Jharkhand leads the country in “Carrying out
Inspections,” since its labour management system implementation has also
focussed on inspections reform.
Across the country, states have made good progress
in general tax reforms like mandating e-registration for VAT and CST; allowing
online payment and filing of returns for various state taxes; providing
e-filing support through service centres and helplines; and risk-based tax compliance
inspections. Twenty nine states allow VAT to be paid online, and 28 states
allow CST to be paid online. While most states allow e-filing of VAT and CST,
21 states have established helplines for users. Twenty five states have
defined timelines for VAT registration and 21 have defined timelines for CST
registration.
However, the report also flags a multitude of
reforms that still need to be implemented effectively by most states. A
majority of states are yet to begin implementing electronic courts to resolve
commercial disputes, i.e., infrastructure to allow for e-filing of disputes,
issuance of e-summons, online payments, e-cause lists and digitally signed
court orders. Twenty six states are yet to introduce reforms along a wide
range of labour inspections under various acts, or on inspections related to
building permits. About 25 states lack online availability of information on
land banks, and use of GIS systems to track industrial land parcels.
The report also highlights the need to properly communicate,
monitor and evaluate these reforms, to ensure that their impact is being felt
on the ground.
“What this report does very well is to provide a
roadmap for states serious about improving their business environment and
creating jobs. This has an inclusive objective as it is the small and medium
enterprises which will gain the most from these reforms,”said Onno Ruhl, World
Bank country Director in India. “The World Bank stands ready to assist state
governments in this important agenda,” he added.
Data for the assessment was collected through a
structured questionnaire that was sent to each state and union territory
government. Following the completion of the data collection and state visits,
the data was evaluated in detail jointly to ensure that the same yardstick was
applied to measure progress for all states. The detailed report can be seen at
the website http://dipp.nic.in.
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