By TIOL News Service

NEW DELHI, AUG 29, 2017: NITI Aayog yesterday launched the Ease of Doing Business report based on an Enterprise Survey of 3,500 manufacturing firms across Indian states and union territories. The survey has been conducted, along with the IDFC Institute, to assess the business regulations and enabling environment across India from firms’ perspective.
 
The Survey was released by the Union Minister of Commerce Nirmala Sitaraman and Minister of Law & Justice and Electronics and Information Technology, Ravishankar Prasad at a function in the capital yesterday.
 
The Ease of Doing Business report based on an Enterprise Survey of 3,500 manufacturing firms Survey comes in the backdrop of the fact that India needs to create an environment that fosters globally competitive firms, capable of driving and sustaining economic growth.
 
The major findings of this report are as follows:
 
++ Economic Performance and Reforms. A higher level of economic activity and better performance on a range of doing business indicators are strongly correlated.

++ Enterprises in high-growth states are significantly less likely to report major or very severe obstacles in (i) land/ construction re­lated approvals, (ii) environmental approvals and (iii) water and sanitation availability relative to enterprises in low-growth states.

++ Quite remarkably, firms located in high-growth states also report 25% less power shortages in a typical month, compared to firms in low-growth states.

++ Improvements over time. Newer and younger firms re­port a more favorable business environment in that they take less time in obtaining approvals than older firms, suggesting an improvement in the business environment.

++  Newer firms include startups established after 2014.

++ In addition, young firms report that most regulatory processes do not constitute a major obstacle to their doing business.

++ Informational gaps. States need to enhance awareness of the steps being undertaken by them to the improve ease of doing business. The survey data show low awareness among enterprises about single window systems, instituted by states.

++ On aver­age, only about 20% of start-ups, which are of recent origin, report using single window facilities introduced by state governments for setting up a business.

++ Labor regulations are a bigger constraint for labor intensive firms. We find that labor intensive sectors, that create proportionately more jobs per unit of capital investment, feel more constrained by labor related regulations. For example, compared to other enterprises, the enterprises in labor intensive sectors:

o   19% more likely to report that finding skilled work­ers is a major or very severe obstacle.

o   33% more likely to report that hiring contract labor is a major or very severe obstacle.

o   Lose a greater number of days due to strikes and lockouts.

o   Report higher average time for environmental approvals and longer power shortages.