India has recorded growth of 6.3 % in 2014-15 and is expected to grow at 7.8 – 8 %, as per Asian Development Bank (ADB), in 2015-16. This being the background, with focus on Make in India campaign run by Government of India to push the manufacturing sector that is propelling the Indian Growth Story, the spotlight has now shifted on the ease of doing business. Further, the food processing sector, which is among the key sectors that are part of Make in India and a main component of manufacturing GDP, is now counted as a vital manufacturing segment in the states, since the National Mission on Food Processing (NMFP), a Centrally-Sponsored Scheme earlier is now under state governments completely.
However, according to sources in MoFPI (ministry of food processing industries), most state governments have not done much in this regard, exception being states like UP, Punjab and Haryana, which have marked the food processing sector as focus area. Interestingly, most of these states, which are focussing on food processing, are located in the northern region of the country.
High priority sector
CII also endorses the view that the northern region, which accounts for 29 per cent of the country’s agriculture and allied GDP, has the potential to develop the food processing sector in a big way. According to the body, the industry features in the list of high priority sectors for Delhi, Haryana, Jammu & Kashmir, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand governments.
Yet, most of these states, do not rank high when it comes to ease of doing business. According to data by ministry of commerce, with regard to ease of doing business in the country, Rajasthan ranks 6th, Uttar Pradesh - 10th, Haryana - 14th, Punjab - 16th, Himachal - 17th, Uttarakhand - 23rd and J&K - 29th.
While Rajasthan needs to push more to reach the position of the leader, Haryana, Uttar Pradesh and Punjab need to accelerate more, while HP, Uttarakhand and J&K need a jumpstart to achieve desired goals in ease of doing business.
States as facilitators
Nirmala Sitharaman, minister of state for commerce & industry (independent charge), stated, “We hope that these rankings would encourage the states to act more as ‘facilitators and less as regulators.’ It has already fostered a healthy competitive spirit amongst the states and they have realised, over a period of time that they cannot afford to remain redtape ridden anymore in the current competitive scenario if they wish to seriously attract investments. The northern states are indeed very proactive and can attract huge investments in the present global scenario by further easing their regulatory procedures.”
Reform measures
In Haryana, as part of its roadmap for 2015, the government has initiated a number of reform measures in streamlining the regulatory burden associated with doing business. These efforts include streamlining and implementing online mechanisms across departments including town & country planning, urban local bodies, labour, environment departments and HSIIDC. Further a single-window clearance system is housed in the chief minister’s office that disposes clearances within two months.
Besides, Haryana is coming up with two Mega Food Parks in Sonepat and Panipat with the establishment of an Enterprises Promotion Policy 2015. “The objective of the Enterprises Promotion Policy 2015 is to position Haryana as a pre-eminent investment destination and facilitate balanced regional and sustainable development supported by a dynamic governance system, wide-scale adoption of innovation & technology, and skill development for nurturing entrepreneurship and generating employment opportunities,” said Manohar Lal, chief minister, Government of Haryana, while urging the industry to invest in Haryana at the recently-held CII Invest North in Chandigarh.
Industries to go competitive
Dwelling on the prime minister’s vision of ‘Make in India’ and ‘Skill India’ campaigns, the Haryana chief minister further shared that the new policy will make industries competitive by reducing the cost of doing business, enhancing productivity, balanced regional growth, and supporting the MSME sector. A slew of path-breaking reforms and incentives which include an employment generation subsidy of Rs 36,000 per person per year to the industry which employs local youth, VAT subsidy upto 75% to MSMEs, and so on will go a long way in attracting and sustaining industry to the state.
In Himachal Pradesh, key initiatives include a common application form for starting up business, and implementing an online Consent Management System for clearances and certificates with respect to environment concerns. Besides, HP has implemented a comprehensive online system for labour related services and implemented a seamless online system for registration, payments and returns’ filing under various state taxes.
Single-window system
In Uttarakhand, Enterprise Single Window Facilitation and Clearance Act, 2012, has been enacted for delivery of services and a single-window clearance mechanism has been set up. In addition, the state government is undertaking several reform measures to facilitate timebound delivery of services to provide computerised service delivery. The government has constituted a nodal agency as part of the single-window system.
Both hill states are focussing more on organic products and have in place policies with respect to that. Jammu and Kashmir enacted the Public Service Guarantee Act, 2011. The Act covers a number of services related to setting up of an industry/ business in the state. The services range that from commercial tax, power, pcb (under forest), to industries (EM-I/ EM-II). The Act also lists punitive provisions for cases where service (s) is/ are not delivered within the stipulated timelines.
Meanwhile, according to Government of J&K, with an aim to achieve self-sufficiency in poultry, meat and milk by 2025, Jammu and Kashmir has formulated Rs 2,000 crore vision document to revamp the livestock sector and submitted it to Central government. Out of this, Rs 814.79 crore have been proposed for dairy development, Rs 423.44 crore for poultry development, while for sheep sector the proposal is for Rs 380 crore and for feed and fodder development Rs 413 crore have been proposed in the document.
Real-time tracking
In Punjab, the Punjab Bureau of Investment Promotion (PBIP), Government of Punjab, acts as a unified regulator and provides a one-stop system for all State Regulatory and Fiscal Incentive Approvals. It acts as single point of contact for investors and with senior government officials to act as relationship officers for corporate houses. It is headed by a chief executive officer who is empowered by all regulatory departments to provide approvals. Officers on deputation from all regulatory departments work together as part of the single window. Further, to complement the single-window structure, an online workflow based single-window portal helps the investor to track approvals real-time.
Sukhbir Singh Badal, deputy chief minister, Government of Punjab, shared in a recently held seminar on Invest North by CII, “We are fully committed to do away with cumbersome regulations and procedures and promote self-certification by the industry. These regulations were put in place by British Raj out of mistrust, hence they have no place today. We fully trust our industry and hence would soon apply self-certification methodology for any new industry in Punjab by December 2015 for various necessary approvals, with no inspector visiting for inspection.”
Infrastructure boost
“Delivering on our commitment to boost social and industrial infrastructure, we have also planned to spend Rs 4,000 crore to link all 340 odd towns of Punjab through 4 – 6 lane expressways and make all social amenities and services online for citizens. We hope that this investment in infrastructure would in turn attract more and more private investment as well,” he added.
“We have created Invest Punjab, to save the industry from applying at 23 separate departments for various approvals at one point. We guarantee all approvals and clearances in just 30 days. Last year we attracted US$3 billion investments from 209 proposals,” he further shared.
“We have allocated separate landbanks for different sectors with pre-approved and cleared sites,” he added. The Government of Rajasthan has also introduced a single-window clearance system. This single-window portal aims to act as a single point of contact for all application and clearances, as well as provides an online portal to track application forms & clearances. The portal also tries to provide information to investors on relevant rules, acts, policies, licensing rules and any other document required for engaging in business. No separate construction permit is required in RIICO industrial areas for plot sizes up to 40,000 sq m.
One-stop solutions
In Uttar Pradesh, the department of labour through the online system provides one-stop solutions encompassing all the services offered by the department. The portal offers several functionalities including online registration, licensing and renewal under the various Labour Acts. The department has also defined clear timelines and process for registration and renewal of various licences. It has mandated submission of inspection reports under various Labour Acts within 72 hours of inspection. The state has implemented a single-window system with a common application form for various clearances.
Expansion of operations
The initiatives have started yielding results with dairy giant Amul expanding its operations in the north in a big way. R S Sodhi, managing director, Gujarat Cooperating Milk Marketing Federation (GCMMF) - Amul, stated, "We are coming up with dairy plants in Faridabad, Kanpur and Lucknow. The plant in Faridabad will be operational soon. The plant in Kanpur will be operational in the next six months. All these plants will have regular processes under the umbrella of brand Amul like cheese, milk, casein (a protein base found in several dairy products) and milk powder."
"The motto behind shifting to Uttar Pradesh is space which we required to set up a huge dairy process. Ample cold chains are located in the northern belt stretching from Punjab to Bihar," he added, on a concluding note.
