When Telangana, the infant State, riding solely on its showpiece Hyderabad, scored a lowly ranking 13 in the Ease of Doing Business in 2015, the stakeholders were in a sombre mood.
But State IT and Industries Minister KT Rama Rao found an opportunity. “Lot of folks wondering about ease of doing business ranking. Not sure about the methodology but we will let our work speak and not fret over this,” he tweeted after the rankings were announced.
And as said, the work did speak over the next year. Telangana, the youngest State in the country, topped the Ease of Doing Business (EoDB) ranking in 2016. Though it shared the honours with Andhra Pradesh, the State has made a grand statement by dethroning last year’s topper, Gujarat, and other business-friendly States.
Telangana attributes this industrial-friendly status to its interactive online system clearance TS-iPASS that facilitates approval of mega projects — over Rs 200 crore or an employment potential of more than 1,000 people — within 15 days. All other projects can be cleared within 30 days.
TS-iPASS (Telangana State Industrial Project Approval and Self Certification System) has ushered in a graft-free industrial approval process, the Minister had said.
Its success can be gauged from the fact that approvals were given to 2,929 proposals for setting up new industries involving an investment of Rs 49,463 crore. These will create direct employment for 1,95,390 people while generating indirect jobs for another 3 lakh. Moreover, these are not mere commitments, as the government recently said 1,138 industries have commenced commercial production.
In 2015, Telangana fell into the category of ‘Acceleration required’ and was ranked 13th in the country with a score of 42.45%. The State needed to focus on easing setting up a business in general, property registration and enabling electronic courts to rank better.
The silver lining though was that the EoDB listed the good practices of the TS-iPASS Act 2014, to enable speedy processing, clearances and approvals.
The State moved quickly and in 2016 more than doubled its score to top the nation with 98.78%.
The top five reforms implemented by the State include access to information and transparency enablers, single window, availability of land, construction permit enablers, and environmental registration enablers. The Ministry especially lauded the good practice to ‘introduce self-certification.’
The EoDB index is a ranking system established by the World Bank Group, where higher rankings indicate better, simpler regulations for businesses and stronger protections of property rights.
In 2016, India ranked 131 among the 189 countries assessed, improving over its previous year’s rank of 134. The report covers 11 indicator sets and 190 economies. The goal is to understand and improve the regulatory environment for business around the world.
Since 2014, the Government of India similarly ranks States on EoDB annually as part of its ‘Make in India’ programme. The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, in partnership with the World Bank Group, assesses various States’ Implementation of Business Reforms and ranks them. The first such assessment was done in 2015.
The assessment for 2016 studied the extent to which States implemented DIPP’s 340-point Business Reform Action Plan (BRAP) 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.
Though the nascent State has left the well-entrenched business- friendly States behind and made a big statement on the national stage, the government is focusing on continuous improvement while raising the bar higher.
Industries Minister KTR wants to cement the numero uno position and make Telangana the preferred business destination in the country. “We should now focus on bringing down the cost of business without compromising on the quality,” he said setting the next target.
• Celkon and Makeno to invest $ 20 million for setting up a LED TV unit in Hyderabad
• Google to invest Rs 1,500 crore for new Hyderabad campus
• Amazon, which opened its biggest fulfilment centre on the outskirts of Hyderabad in June 2015, will set up its biggest global campus outside the US, besides a data centre to back its cloud service business (Amazon Web Services) in Hyderabad
• Flipkart opened its largest fulfilment centre on the outskirts of Hyderabad in October 2015
• Apple Inc is setting up a development facility in the Financial District of Hyderabad at a cost of $25 million. The project is coming up on 250,000 sft and employment for 4,500 techies is expected
• A second aerospace park, spread over 1,000 acres, will be situated at Eliminedu, on the outskirts of Hyderabad
• Micromax Informatics Ltd will invest Rs 80 crore to set up a mobile phone manufacturing facility in Rangareddy district
• Toshiba Transmission and Distribution Systems India Pvt to invest Rs 290 crore to set up a transformer and switchgear manufacturing unit in Medak district
• Swedish furniture major IKEA purchased 13 acres, its first land purchase in India, near the IT hub of Hyderabad for setting up a retail store
• Low-cost mobile devices maker DataWind Inc to invest Rs 100 crore to set up smartphones, tablets and netbooks manufacturing facility near the international airport
• US-based taxi-aggregator Uber to invest $50 million (around Rs 335 crore) in building a response and support centre in Hyderabad