15 States complete ease of doing business reforms

Gujarat, Uttar Pradesh and Uttarakhand are the latest to complete the reform process

Get additional borrowing permission of ₹ 9,905 crore

The number of States successfully completing the “Ease of Doing Business” (EoDB) reforms has increased to 15. Three more States namely, Gujarat, Uttar Pradesh and Uttarakhand have reported completion of “Ease of Doing Business” reforms stipulated by the Department of Expenditure.

On receipt of recommendation from the Department for Promotion of Industry and Internal Trade (DPIIT), the Department of Expenditure has granted permission to these three States to raise additional financial resources of ₹ 9,905 crore through Open Market Borrowings.

Earlier, Andhra Pradesh, Assam, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Odisha, Punjab, Rajasthan, Tamil Nadu and Telangana had also reported completion of this reform, which was confirmed by DPIIT.

On completion of reforms facilitating ease of doing business, these 15 States have been granted additional borrowing permission of ₹ 38,088 crore. State wise amount of the additional borrowing permitted is as under:

Sl. No.	State	Amount (Rs in crore)
1.	Andhra Pradesh	2,525
2.	Assam	934
3.	Gujarat	4,352
4.	Haryana	2,146
5.	Himachal Pradesh	438
6.	Karnataka	4,509
7.	Kerala	2,261
8.	Madhya Pradesh	2,373
9.	Odisha	1,429
10.	Punjab	1,516
11.	Rajasthan	2,731
12.	Tamil Nadu	4,813
13.	Telangana	2,508
14.	Uttar Pradesh	4,851
15.	Uttarakhand	702

The ease of doing business is an important indicator of the investment friendly business climate in the country. Improvements in the EoDB will enable faster future growth of the state economy. Therefore, the government of India had in May 2020, decided to link grant of additional borrowing permissions to States who undertake the reforms to facilitate ease of doing business. The reforms stipulated in this category are:

(i)      Completion of first assessment of ‘District Level Business Reform Action Plan’

(ii)   Elimination of the requirements of renewal of registration certificates/approvals/licences obtained by businesses under various Acts.

(iii)    Implementation of computerized central random inspection system under the Acts wherein allocation of inspectors is done centrally, the same inspector is not assigned to the same unit in subsequent years, prior inspection notice is provided to the business owner, and inspection report is uploaded within 48 hours of inspection.

In view of the resource requirement to meet the challenges posed by the COVID-19 pandemic, the Government of India had on 17th May, 2020 enhanced the borrowing limit of the States by 2 percent of their GSDP. Half of this special dispensation was linked to undertaking citizen centric reforms by the States. The four citizen centric areas for reforms identified were (a) Implementation of One Nation One Ration Card System, (b) Ease of doing business reform, (c) Urban Local body/ utility reforms and (d) Power Sector reforms.

Till now, 18 States have carried out at least one of the four stipulated reforms and have been granted reform linked borrowing permissions. Out of these, 13 States have implemented the one nation one ration card system, 15 States have done ease of doing business reforms, 6 States have done local body reforms and 2 States have undertaken power sector reforms. Total reform linked additional borrowing permission issued so far to the States stands at Rs.­­­ 86,417 crore.

Ease of Doing Business linked borrowing: 15 states authorised additional market borrowings after completing stipulated reforms. Fifteen States have completed the Ease of Doing Business reforms and, after confirmation by DPIIT, received permission for additional open market borrowings. The EoDB conditions require completion of a district-level business reform assessment, elimination of renewal requirements for business registrations/approvals/licences, and adoption of a computerized central random inspection system with centralised inspector allocation, non-repetition of inspectors at the same unit, prior notice to businesses, and upload of inspection reports within 48 hours.