Assessment of State Implementation of Business Reforms

1. Assessment of State
Implementation of Business
Reforms
September 2015

2. This report is the culmination of a journey…
• Report
prepared and
published
September
2015
• WBG and
KPMG review
of dataset to
ensure
robustness and
veracity
August
2015
• KPMG visits to
states to
validate
reported
reforms
July
2015
• Questionnaire
sent to states
• 30th: Cut-off
date for
reforms to be
counted in this
cycle
June
2015
• DIPP issues 98
point business
reform action
plan to all state
Governments
December
2014

3. A brief note on methodology
• Assessment framework, featuring 285 questions, shared with States in the first week of June.
• Questions could be answered with one of three options:
• ‘Yes’: implied that the respective parameter had been implemented in the State.
• ‘No’ implied that the parameter had not yet been implemented.
• ‘Not Applicable’ was only used in cases where the reform was not relevant for the State.
• Study team visited states, met with officials to understand the reforms that were claimed and
collected supporting evidence on reform implementation.
• Dataset and evidence jointly evaluated by study team and World Bank Group.
• Revised data and explanations sent back to each state for review. States responded with
clarifications.
• Full dataset reviewed once again jointly by KPMG and WBG to ensure all reforms implemented by
June 30, 2015 were counted.
• Overall implementation status score computed by dividing the number of questions with a final
Yes response by the total number of applicable questions

4. Overall ranking: State implementation of
business reforms (based on KPMG findings)
Rank State Score Rank State Score
1 Gujarat 71.14% 17 Himachal Pradesh 23.95%
2 Andhra Pradesh 70.12% 18 Kerala 22.87%
3 Jharkhand 63.09% 19 Goa 21.74%
4 Chhattisgarh 62.45% 20 Puducherry 17.72%
5 Madhya Pradesh 62.00% 21 Bihar 16.41%
6 Rajasthan 61.04% 22 Assam 14.84%
7 Odisha 52.12% 23 Uttarakhand 13.36%
8 Maharashtra 49.43% 24 Chandigarh 10.04%
9 Karnataka 48.50% 25 Andaman and Nicobar Islands 9.73%
10 Uttar Pradesh 47.37% 26 Tripura 9.29%
11 West Bengal 46.90% 27 Sikkim 7.23%
12 Tamil Nadu 44.58% 28 Mizoram 6.37%
13 Telangana 42.45% 29 Jammu and Kashmir 5.93%
14 Haryana 40.66% 30 Meghalaya 4.38%
15 Delhi 37.35% 31 Nagaland 3.41%
16 Punjab 36.73% 32 Arunachal Pradesh 1.23%

5. States are placed into four groups on the
basis of implementation score
Leaders
•Andhra Pradesh
•Chhattisgarh
•Gujarat
•Jharkhand
•Madhya Pradesh
•Odisha
•Rajasthan
Aspiring Leaders
•Delhi
•Haryana
•Karnataka
•Maharashtra
•Punjab
•Tamil Nadu
•Telangana
•Uttar Pradesh
•West Bengal
Acceleration Required
•Andaman and Nicobar
•Arunachal Pradesh
•Assam
•Bihar
•Chandigarh
•Goa
•Himachal Pradesh
•Jammu and Kashmir
•Kerala
•Meghalaya
•Mizoram
•Nagaland
•Puducherry
•Sikkim
•Tripura
•Uttarakhand
Jump Start Needed

6. The results indicate interesting geographic
contiguities

7. In which areas have reforms occurred?
17
16
16
15
14
14
13
12
12
11
11
Tax General
VAT Registration
CST Registration
Construction Permits
Land Allotment
Labour general
Infrastructure general
Environment general
Shops & Est registration
Building plan approval
Factory license reg
Top 10 sub-areas in which the states have implemented reforms

8. In which areas are reforms lagging?
29
26
26
26
26
26
26
25
25
25
Electronic Courts
Tree felling Inspection
Paym of Gratuity Insp
Min Wages Inspection
Shops & Est Inspection
Payment of Wages Insp
Building plan inspection
Eq Remuneration Insp
Availability of Land
Payment of Bonus Insp
Top 10 sub-areas in which states need to reform

9. Top 5 performers in each area of the report
81.48%
78.57%
77.78%
71.43%
65.38%
0% 20% 40% 60% 80% 100%
Punjab
Andhra Pradesh
Chhattisgarh
Odisha
Rajasthan
Top 5 states - Setting up a business
72.73%
72.41%
70.27%
63.64%
62.16%
0% 20% 40% 60% 80% 100%
Madhya Pradesh
Gujarat
Maharashtra
Rajasthan
Andhra Pradesh
Top 5 States - Allotment of land and obtaining
construction permit
100.00%
85.19%
70.37%
70.37%
66.67%
0% 20% 40% 60% 80% 100%
Gujarat
Andhra Pradesh
Rajasthan
Punjab
Madhya Pradesh
Top 5 States - Complying with Environment
Procedures
100.00%
76.47%
76.47%
75.00%
70.59%
0% 20% 40% 60% 80% 100%
Jharkhand
Gujarat
Chhattisgarh
Andhra Pradesh
Uttar Pradesh
Top 5 states - Complying with labour regulations

10. Top 5 performers in each area of the report
88.89%
75.00%
75.00%
68.75%
60.00%
0% 20% 40% 60% 80% 100%
Maharashtra
Gujarat
Madhya Pradesh
Delhi
Andhra Pradesh
Top 5 states - Obtaining infrastructure related
utilities
97.73%
90.63%
89.47%
85.29%
82.50%
0% 20% 40% 60% 80% 100% 120%
Karnataka
Andhra Pradesh
Rajasthan
Odisha
Madhya Pradesh
Top 5 States - Registering and Complying with Tax
Procedures
72.00%
71.74%
62.00%
58.00%
50.00%
0% 20% 40% 60% 80% 100%
Jharkhand
Gujarat
Andhra Pradesh
Chhattisgarh
Rajasthan
Top 5 States - Carrying out inspections
55.56%
44.44%
33.33%
33.33%
33.33%
33.33%
0% 20% 40% 60% 80% 100%
Maharashtra
Madhya Pradesh
Gujarat
Chhattisgarh
Tamil Nadu
Delhi
Top 6 states - Enforcing Contracts

11. State Progress in Brief
Gujarat
Reforms Achieved:
Setting Up a Business:
 Single window system covers 6 out of 19
procedures
 Mandates that VAT and PT registration
certificates should be issued in a day
from submission of application
Land and construction permits:
 Availability of land banks and GIS
systems
 Digitization of sub-registrar and land
records offices
 Effective construction permitting policies
and procedures
Environment:
 Online consent management system for
environmental consents available
Labour:
 Labour Department allows Self-
Certification under all laws
Infrastructure:
 Electricity connection application is
online, and is provided within 15 days of
application. Applicant receives a fixed
cost estimate.
Taxes:
 E-filing of returns and e-payment
available for some state taxes
 VAT registration is fully online
Further Reforms Needed:
Inspections:
 Need to mandate that surprise inspections
should be carried out only on the basis of
complaints with permission from the Head
of the Department.
Enforcing Contracts:
 Need to establish electronic courts
Andhra Pradesh
Reforms Achieved:
Setting Up a Business:
 Single window system provides 17
services
 Information availability on licenses
and registrations
Environment:
 Online consent management system
for environmental consents available
Land and construction permits:
 Effective construction permitting
policies and procedures
 Online Property Registration
application
 Building plan approval is fully online
Labour:
 Labour Department allows Self-
Certification under most laws
 Approval of plan and permission to
construct/extend/or take into use any
building as a factory under the
Factories Act, 1948 is fully online
Infrastructure:
 NOC from Fire department is fully
online
Taxes:
 All state taxes can be filed and paid
online
Further Reforms Needed:
Labour and Environment:
 Need to make a number of Labour and
Environment registration procedures fully
online
Inspections:
 Need to mandate that surprise inspections
should be carried out only on the basis of
complaints with permission from the Head
of the Department.
 Need to mandate joint or synchronized
inspections under Labour Acts.
 Need to introduce computerized risk
assessment and inspector allocation for
labour laws
Enforcing Contracts:
 Establishing electronic Courts
 Need to establish commercial courts and
reduce judicial vacancies

12. State Progress in Brief
Jharkhand
Reforms Achieved:
Land and Construction Permits:
 Online Property Registration Procedures
Labour:
 Online consent management system for
environmental consents available
 Labour Department allows Self-
Certification under most laws
 All Labour Department registrations are
fully online
Taxes:
 All state taxes can be filed and paid
online
Inspections:
 All Labour inspections are transparent
and use computerized risk assessment
and inspector allocation
Further Reforms Needed:
Setting Up a Business:
 Need to develop and implement a
comprehensive list of licenses and
registrations required for business start-up.
Land and Construction Permits:
 Land banks are not available online
 GIS systems need to be developed with
infrastructure information
Inspections:
 Building Plan Approval Inspections require
transparency and computerized risk
assessment and inspector allocation.
Enforcing Contracts:
 Electronic courts need to be implemented.
Chhattisgarh
Reforms Achieved:
Setting Up a Business:
 Offline single window system
providing 12 services
Land and Construction Permits:
 Clear and transparent land allotment
procedures
Labour:
 Labour Department allows Self-
Certification under all laws
 Several Labour Department
registrations and renewals have been
made more transparent with fully
online application, payment and
approvals
Taxes
 VAT and CST registrations have been
made more transparent with fully
online application, payment and
approvals
 E-filing and e-registration enabled for
all state taxes
Inspections:
 Inspections under 8 Labour laws have
been made more transparent and
incorporate computerized risk
assessment and inspector allocation
Further Reforms Needed:
Setting Up a Business:
 Information availability on licenses and
registrations
Land and Construction Permits:
 Streamlining Property Registration
Procedures
 Streamlining Construction Permit
Procedures
 Availability of land banks and GIS systems
Environment:
 Streamlining General environmental
procedures
Infrastructure:
 Streamlining Electricity Connection Process
 Streamlining Inspection for felling trees
Inspections:
 Streamlining Inspection under The Water
(Prevention and Control of Pollution) Act,
1974
 Streamlining Inspection under The Air
(Prevention and Control of Pollution) Act,
1981
Enforcing Contracts:
 Electronic courts need to be implemented

13. State Progress in Brief
Madhya Pradesh
Reforms Achieved:
Setting Up a Business:
 Online single window and CAF that
provides 6 services
Land and Construction Permits
 Clear timelines for construction permits,
assessment of building plans using
AutoCAD, and single inspection
 Application and payment for property
registration online, and data at local
municipality and land records offices are
digitized
Environment:
 Online environmental consent
management system and consent
register; green industries exempted from
environmental inspections.
 Auto-renewal allowed for all
environmental Consents to Establish
Taxes:
 Tax registration, return filing and
payment fully online for all state taxes.
Labour:
 Allows Self-Certification under all laws
 Boiler license application and renewal
made more transparent with fully online
application, payment and approvals
Infrastructure
 Electricity Connection process fully
reformed and transparent
Further Reforms Needed:
Inspections:
 Information availability on licenses and
registrations
 Need to expand online single window to
more services
Infrastructure and Environment:
 Tree-felling permission, Fire NOC and
Municipal Solid Waste Authorization need
to be made more transparent with fully
online application, payment and approvals
Inspections:
 Inspections should be made more
transparent and incorporate computerized
risk assessment and inspector allocation
Enforcing Contracts:
 Electronic Courts need to be implemented
Rajasthan
Reforms Achieved:
Setting Up a Business:
 Offline single window system that
provides 9 services
Land and Construction Permits:
 Application and payment for property
registration can be made online, and
data at local municipality, land records
and sub-registrar offices are digitized
 Clear and transparent land allotment
procedures
Environment:
 Established an online environmental
consent management system and
consent register; green industries
exempted from environmental
inspections.
Labour:
 Allows Self-Certification under all laws
Taxes:
 Tax registration, return filing and
payment are fully online for all taxes.
 Registration for Entertainment Tax
process made more transparent with
fully online application, payment and
approvals
Inspections:
 Inspections under the Factories Act,
1948 made more transparent and
incorporate computerized risk
assessment and inspector allocation
Further Reforms Needed:
Setting Up a Business:
 Develop an online single window system for
application and payment of more services
 Comprehensive checklist of all licenses,
registrations and licenses required to set up a
business should be developed and made
online.
Land and Construction Permits:
 Availability of land banks and GIS systems
 Integrate data at local municipality, sub-
registrar and land records offices,
 Integrate registration with mutation
Infrastructure:
 Electricity Connection applications should be
reformed to allow online application, require
only 2 documents and third-party internal
inspections, along with fixed cost estimates and
connections within 15 days.
 Tree-felling permission and Fire NOC processes
need to be made more transparent with fully
online application, payment and approvals
Inspections:
 Inspections for felling trees should be made
more transparent and incorporate
computerized risk assessment and inspector
allocation
Enforcing Contracts:
 Electronic courts need to be implemented
 Commercial courts need to be established and
judicial vacancies need to be reduced

14. State Progress in Brief
Odisha
Reforms Achieved:
Setting Up a Business:
 Offline single window system providing
11 services
Land and Construction Permits:
 Clear and transparent land allotment
procedures
Labour:
 Self-Certification allowed under 6 labour
laws
Taxes:
 Electronic payment is possible for all
state taxes , and e-filing is available for
most state taxes
Further Reforms Needed:
Setting Up a Business:
 Need to develop an online single window
system for application and payment of
more services
Land and Construction Permits:
 Land records should be digitized at the local
municipality office, and databases should be
integrated with land records and sub-
registrar offices
 Enabling online application and payment for
property registration
Labour:
 Several Labour Department processes need
to be made more transparent with fully
online application, payment and approvals:
Infrastructure:
 Need to define clear timelines for
electricity, water and sewage connections
Inspections:
 Inspections under the Factories Act, 1948
should be made more transparent and
incorporate computerized risk assessment
and inspector allocation
Enforcing Contracts:
 Electronic courts need to be implemented
 Commercial courts need to be established
and judicial vacancies need to be reduced
Maharashtra
Reforms Achieved:
Land and Construction Permits:
 Clear and transparent land allotment
procedures
 Data digitized at land records, sub-
registrar and local municipality
offices
 For construction permits, defined
clear timelines, enabled assessment
of building plans using AutoCAD, and
mandated a single inspection
 Online application and payment for
property registration
Labour:
 Labour Department allows Self-
Certification under 6 laws
Infrastructure:
 Clear timelines defined for electricity,
water and sewage connections
Taxes:
 Electronic payment is possible for all
state taxes
 E-Registration is mandated for VAT
and CST
Further Reforms Needed:
Setting Up a Business:
 The online single window system should be
expanded to include more services.
Taxes:
 Entertainment tax, entry tax and luxury tax
registration need to be made more
transparent with fully online application,
payment and approvals
Inspections:
 Inspections under Labour laws should be
made more transparent and incorporate
computerized risk assessment and
inspector allocation

15. State Progress in Brief
Karnataka
Reforms Achieved:
Setting Up a Business:
 Mandated e-registration for VAT and CST
Taxes:
 Transparent and fully online application,
payment and approval processes for all
state taxes.
 Online return filing and e-payment for all
State taxes
Labour:
 Transparent and fully online application,
payment and approval processes for
Shops and Establishments registration
and renewal.
Further Reforms Needed:
Setting Up a Business:
 Need to develop an online single window
system for application and payment of
more services
Land and Construction Permits:
 Land records should be digitized at the land
records and local municipality office, and
databases should be integrated with sub-
registrar offices
 All construction permit and NOC processes
need to be made more transparent with
fully online application, payment and
approvals
Labour:
 Self-Certification under Labour laws should
be expanded
Inspections:
 Inspections should be made more
transparent and incorporate computerized
risk assessment and inspector allocation
Enforcing Contracts:
 Electronic courts should be established
 Commercial courts should be established
and judicial vacancies should be reduced
Uttar Pradesh
Reforms Achieved:
Labour:
 All Labour registration and
renewal processes have been
made transparent with mostly
online application, payment and
approvals
Taxes:
 E-Filing of returns under most
State taxes, and e-payment of all
State taxes
 VAT, CST and Entry Tax
registration and renewal
processes have been made
transparent with mostly online
application, payment and
approvals
Further Reforms Needed:
Land and Construction Permits:
 Enabling online application and
payment for property registration
 Land records should be digitized at the
land records and local municipality
office, and databases should be
integrated with sub-registrar offices
 Several more processes need to be
made more transparent with fully
online application, payment and
approvals
Inspections:
 All inspections should be made more
transparent and incorporate
computerized risk assessment and
inspector allocation
Enforcing Contracts:
 Electronic courts should be established
 Commercial courts need to be
established and judicial vacancies need
to be reduced

16. Download the full report
now at: http://dipp.nic.in