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Government policy

Reforming Single Window Clearance for Entrepreneurs

Government of India is encouraging states to participate in these ranking as competition among states help in increasing overall rank of India in global rankings to attract foreign investments
Reforming Single Window Clearance for Entrepreneurs
Image credit: Shutterstock
Principal Economist, ICAR-Central Research Institute for Dryland Agriculture
6 min read
Opinions expressed by Entrepreneur contributors are their own.

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Andhra Pradesh topped the list of states in Ease-of-Doing Business (EoDB) rankings for the second year in a row in the close contest in the rankings given by Department of Industrial Policy and Promotion (DIPP), Government of India for the year 2018. The EoDB evaluation is based on 372 reform action points centred on implementation and feedback from the citizens. The reforms aimed at to ease government regulations and systems in areas such as labour, environmental clearances, single-window system, construction permits, contract enforcement, registering property and inspections. Higher rankings (a low numerical value) indicate better, usually simpler regulations for businesses.

Improvement in EoDB positively influences economic growth and private investments. Government of India is encouraging states to participate in these ranking as the competition among states helps in increasing overall rank of India in global rankings to attract foreign investments. Most states have taken the rankings seriously to attract private investors. The intense competition can be judged from the fact that the difference in Combined Score Card of Reform Implementation and Feedback between Andhra Pradesh (98.3per cent ) and seventh-placed Madhya Pradesh (97.3per cent ) was just over a percentage point. Two states, Telangana and Jharkhand had implemented all the reforms for EoDB, while Andhra, Haryana and Gujarat scored 99.7per cent . However, the main difference among states came from differences in the feedback score.

For example, an online single window System was implemented in 21 State/UTs for existing and new industries with functionality for online application submission, payment and approvals. However, actual satisfaction levels of the users of the single window system are not up to the mark even in the best state like Andhra Pradesh.

Single Desk Beuro (SDB) was created in Andhra Pradesh in April 2015 to clear all files related to approvals and setting up of industries in the state as a single point of contact. It coordinates clearances and approvals from the 18 line departments. SDB is aimed at providing user-friendly services and clearances to all existing and new industrialists.  Line departments give approvals in two stages. The 1st stage includes pre-establishment approvals to set up a factory and the 2nd stage consist of pre-operation approvals to commence the operations.

The clearance of the 1st stage is necessary to give clearance for the 2nd stage later. However, a recent CAG report pointed out that sometimes, pre-operation approval is given before the approval for pre-establishment. This shows that there was no validation to ensure all pre-establishment approvals when they apply for pre-operation approvals. The applicants (both new and existing entrepreneurs) have to fill in a Common Application Form (CAF) to obtain approvals for both fresh units and approvals for expansion of the existing units.

There is no provision of uploading copies of already taken approvals by the existing entrepreneurs while applying for expansion of units.  The information of existing approvals while applying for expansion not only eliminates duplication and confusion in line departments but also speed up the process.  The information about approvals required/ obtained/ yet to be applied by the entrepreneurs to the SDB and line departments is crucial for speedy decision making.

Empowering Line Departments

The competent authorities of line departments record their remarks viz., approved/rejected/ additional information called for as the case may be. The line departments take further action on the submission of the requisite information by the applicants. Such remarks reflect the status of the applications. In some cases, the status of these approvals was shown in the portal as ‘Final Approval Pending’/‘Additional information called for’, in spite of the unit had already obtained these

approvals. The above discrepancy was due to the lack of authorisation to the line departments to update the final action taken subsequent to enter the initial remarks in the SDP portal.

Interlinking With Other Government Portals

The problem of incomplete data/data inconsistency can also be solved through interlinking with other government portals. Now almost every department is maintaining a huge database about the citizen services relating to the entrepreneurs and factories. Aadhar & land records can be used as a unique identifier to link this inter-departmental database to the SDB to facilitate auto-filling of the existing information without need of unnecessary inputting by the applicant and re-verification by the line departments.

For example, linking SDB portal with credit defaulter data bank of Credit Information Bureau (CIB) will facilitate the SDB to understand the creditworthiness of the applicants and also help in linking with banks and other financial institutions.  Similarly linking portal with Buvan(a government portal on land utilization) will facilitate to identify the exact location of the factory along with the altitude and longitude of the area. The auto-filling of this data by linking SDB with other government portals will reduce a lot of duplication of work and will enhance efficiency and speed.

Grievance Redressal Mechanism

There is a delay in grievance redressal mechanism. The SDB resolved only 44per cent  of grievances received in time. Some were pending for a period ranging from 108 to 606 days as against the stipulated 30 days limit. It indicates that, once the entrepreneur is stuck up with some problem, it is difficult to get out of the problem.  SDB needs to enhance its implementation capabilities to address problems faced by entrepreneurs to resolve them timely. The follow up and in build feedback mechanism based on the monitoring framework is important for timely redressal of grievances.

Transparency

The SDP portal gave district wise, category wise and sector wise details of application and status of progress. However, factory wise details are missing. The availability of factory wise details will enhance transparency and accountability and also reduce discrimination at every stage of the approval process.

SDB as facilitator

SDB should not stop at getting approvals from the line departments. Given the custodian of huge database related to all existing and new factories, it can take a leading role in promoting the industries in the state by providing leasing services to get finance, to link with venture capitalists, link with government research institutions to provide technical and marketing support and help in preparing viable projects.

 

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