UP policy for failing industries aims to improve ease of doing business

Targetting to become a $ trillion economy by 2024, Uttar Pradesh is looking to improve its ‘ease of doing business’ climate, which includes coming out with a policy for the sick industrial units.

In the domestic ‘ease of doing business’ tally, UP is currently ranked 12th with a score of 92.89% behind top ranked Andhra Pradesh, Telangana and Haryana in the league of 36 states and union territories (UT). However, UP was ranked above Maharashtra, Odisha, Tamil Nadu, Punjab, Himachal Pradesh, Delhi and Kerala.

‘Ease of doing business’ is an index of the Indian states and UT based on their scores against the template of Centre’s ‘Business Reforms Action Plan (BRAP). The rankings are done by the World Bank in consort with the Department of Industrial Policy and Promotion (DIPP).

Charing a review meeting here, chief minister Yogi Adityanath recently instructed officials to take steps for improving the state's ranking and resolve all irritants in this regard. He has also mandated to hold the ‘ease of doing business’ review meeting every week.

Besides, the officials have been directed to accelerate the process of ‘land pooling’ for the timely completion of various developmental and infrastructure projects.

Also, the government is drafting a policy for the sick industrial units and taking measures to liberalise the industrial and investment related processes to speed up the projects, especially for which UP had signed memorandum of understanding (MoU) with the private companies.

At the UP Investors Summit here in February 2018, the government had signed more than 1,000 MoUs worth Rs 4.68 trillion with different public and private sector companies, of which projects tolling Rs 1.25 trillion have already witnessed their foundation laying so far.

Last month, Reserve Bank of India (RBI) regional director Lakshmi Kanth Rao had said the central bank was actively monitoring the credit flow to the state micro, small and medium enterprises (MSME), as also the revival of sick industrial units.

Since MSMEs contribute 60 per cent to UP’s industrial production, the state government has stressed on the imperative of boosting the sector with easy working capital loans for realising the ambitious target.

There is an empowered committee to monitor lending and the revival of the sick MSMEs. “Although, the commercial banks are directly involved in the revival of sick units, the RBI is actively monitoring the development,” Rao said adding the MSME sector would play a vital role towards the prospective achievement of the $trillion economy target in UP.

Nearly 80 per cent of the MSMEs, especially the micro units, still do not have access to institutional capital and they largely depend upon the unorganised players for meeting their financial needs.

Meanwhile, Adityanath has asked for developing an online MoU tracking system and incentive management tool to address the grievances of investors.