Working on converting red tape into red carpet: DIPP secy

The dept wants to cut down legal, regulatory & procedural complexity associated with doing business in India

Several measures are in the works at central and state levels to streamline laws and simplify processes for converting "red tape into red carpet" for investors, Department of Industrial Policy and Promotion (DIPP) said on Tuesday.

DIPP Secretary Ramesh Abhishek said the department wants to cut down legal, regulatory and procedural complexity associated with doing business in India.

He was speaking at the launch of NCAER's State Investment Potential index report.

"The Prime Minister has elucidated his vision of converting red tape into red carpet. To support this vision, DIPP is working with all central departments and state governments to drastically streamline the laws and regulations and make them available to the public," he said here.

"Simplify application forms and processes and take them online preferably through single-window systems, streamline the inspection regime by introducing risk-based approaches and offering self-certification and third-party certification alternatives to low and medium risk businesses."

Asserting that the government is committed to improving ease of doing business, Abhishek said states are very enthusiastic after their rankings by the World Bank, and there is a healthy competition among them to bring about changes.

Talking about specifics, he said the report has cited corruption, delay in getting approvals before starting a business and hurdles in getting environmental clearance as the top three constraints.

"These are the areas DIPP wishes to address as part of our ease of doing business initiatives," he added.

The secretary suggested that the states come out with ideas and measures to improve on these three issues.

"They should be actually getting regular feedback from industry and business about their initiatives," Abhishek said.

According to the secretary, there is so much room for improvement even among the states that were ranked highly last year in the World Bank's report.

India improved its ranking to 130 from 134 out of 189 nations in the World Bank Doing Business 2016 report.

Gujarat took the top slot on the ease of doing business index prepared by the World Bank while Andhra Pradesh and Jharkhand came in second and third, respectively.

Speaking at the function, Telecom Secretary J S Deepak said domestic demand is important to increase the share of manufacturing in GDP.

The government is aiming at increasing the share of manufacturing to 25 per cent of GDP by 2020 from the current about 16 per cent.

"This assumes 35 per cent rate of growth of manufactured exports and looking at global situation, it's not happening, it's down. So, the only way that manufacturing or Make in India can become real is based on domestic demand," he stressed.

According to him, domestic demand will come from sectors such as "electronics consumption which would be $400 billion (industry) by 2022, telecom which would be $300 billion sector and IT/ITeS services as they are used more in domestic economic services through Digital India and other programmes".

According to the NCAER's State Investment Potential Index (N-SIPI 2016) report, Gujarat, Delhi and Tamil Nadu are the top three states for medium-term investment decisions.

States that have a significant amount of catching up to do include Bihar, Uttar Pradesh and Jharkhand, it noted.

The survey has covered only 21 states -- just Assam from among seven north-eastern states. Goa, Jammu & Kashmir and Sikkim are out of it.

The findings are based on five pillars - labour, infrastructure, economic climate, political stability and governance, and perceptions.