Assessment of State Implementation of Business Reforms 2016

The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, in partnership with the World Bank Group, is pleased to release the results of the Assessment of State Implementation of Business Reforms 2015-16. The Assessment studies the extent to which states have implemented DIPP’s 340-point Business Reform Action Plan (BRAP) for States/UTs 2015-16, covering the period July 1, 2015 to June 30, 2016. The BRAP includes recommendations for reforms on 58 regulatory processes, policies, practices or procedures spread across 10 reform areas spanning the lifecycle of a typical business.

Data for this assessment was collected from State Governments on the BRAP portal. The portal, among the first of its kind globally, allowed State Governments to submit evidence of implemented reforms. At least 32 State and UT Governments submitted evidence of implementation of 7,124 reforms. These submissions were reviewed by the World Bank team and validated by DIPP’s team to study whether they met the objectives of the BRAP. The portal allowed for collaborative dialogue between DIPP and the State Governments in finalizing the evidence submitted. A total of 6,069 reforms were approved as implemented or not applicable on the portal.

The results of the assessment demonstrate that States have increasingly risen to addressing the challenge of making it easier to do business. The national implementation average stands at 48.93%, significantly higher than last year’s national average of 32%. This demonstrates the great progress made by States this year.

The final rank of the States as of June 30, 2016 is shown in the table below.

Based on implementation of reforms, States have been divided into four categories, as below

The highlight of the implemented reforms during this period is as follows:

• Single Window Systems: Various States have created a dedicated body/bureau as a one-stop system for State level regulatory and fiscal incentive approvals. The online single window system has a provision for filing applications, payment, status tracking, online scrutiny and approval of applications. The officials of the Body/Bureau have also been given powers to grant approvals.

o     States include: Andhra Pradesh, Chhattisgarh, Gujarat, Haryana, Jharkhand, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Telangana, Uttarakhand

• Tax reforms: States have made good progress in tax reforms. These include mandating e-registration for Value Added Tax (VAT), Central Sales Tax (CST), Professional Tax, Entry tax, etc, allowing online payment and return filing; providing e-filing support through service centers and helpline and risk-based tax compliance inspections.

o   States include: Bihar, Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Uttar Pradesh, Uttarakhand, West Bengal

• Construction permits: Many States have allowed applicants to apply online and upload building plans for automated construction permit approval. In addition, several states have developed AutoCAD-based systems that automatically scan building plans and monitor compliance with the building bye-laws and building codes in force.

o   States include: Andhra Pradesh, Chhattisgarh, Gujarat, Haryana, Madhya Pradesh, Maharashtra, Rajasthan, Telangana, Uttrakhand

• Environment and labour reforms: States have also implemented advanced automated solutions to deal with environmental and pollution related applications and approvals. These solutions provides hassle free, 24 X 7 e-access to businesses to apply online, track applications, file returns and statements and get online permissions under various Acts and regulations.

o   States include: Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, Uttarakhand, West Bengal

• Inspection Reforms: A number of inspection reforms with regard to labour, tax and environment related compliances have been introduced across the States to help businesses comply with inspection requirements in a user-friendly manner. To bring in transparency, the states have also published comprehensive procedures and checklist for various inspections and have implemented online systems for allocation of inspectors to increase efficiency and effectiveness of the procedure.

o   States include: Andhra Pradesh, Chhattisgarh, Gujarat, Haryana,  Jharkhand, Karnataka, Madhya Pradesh, Odisha, Punjab, Rajasthan, Punjab, Telangana, Uttar Pradesh, Uttarakhand

• Commercial disputes and paper-less courts: There has been significant progress this year in the area of judicial reforms compared to last year, particularly due to the passage of the Commercial Courts, Commercial Divisions and Commercial Appellate Divisions Act. To address the concern of time and costs associated with various legal processes, District Courts in various states have also made the provision of making online payments, e-filing and e-summons. Few States have also filled up vacancies in District Courts/commercial courts to ensure availability of adequate capacity for dealing with various cases.

o   States include: Andhra Pradesh, Chhattisgarh, Gujarat, Haryana, Jharkhand, Madhya Pradesh, Maharashtra, Rajasthan, Telangana

However, the present evaluation also highlights the need to properly communicate, monitor and evaluate these reforms to ensure that their impact is being felt on the ground.

A detailed report will be published in November. All data is publicly available athttp://eodb.dipp.gov.in.