Parameters affecting ease of doing business rankings: govt. to PMO

Mumbai: Maharashtra has raised concerns with the Prime Minister’s office (PMO) over certain performance parameters it claims is holding the State back in the race to top the ease of doing business rankings. In a month in which West Bengal, Chhattisgarh and Madhya Pradesh have scored a perfect 100 for the first time, Maharashtra has again struggled to break into the top 10, according to the latest quarterly review of business rankings. The ranking system for ease of doing business was introduced in 2015.

State government officials said the concerns were over two key parameters: a uniform building code for the State, and construction permits issue for building warehouses. “There is consensus here that with Mumbai included in the scheme of things, there cannot be a uniform building code for the State. We have pointed this out to the PMO.”

Confusion over permits

In a presentation made to the PMO, the State government has claimed that selection of construction permits has been random, as it hasn’t received any proposals for building warehouses in the last five years. It has also expressed confusion over how construction permits are taken into consideration for the rankings. “Even the perception feedback methodology (taken from contributors who have never dealt with construction permits) is not robust,” says an assessment report by the government .

The State stood 12th in ease of doing business rankings, thanks to a better performance in several sectors, including issuing construction permits faster, easing norms for registration of industries and businesses, sales tax and obtaining electricity connections. Chief minister Devendra Fadnavis told The Hindu that the 30-point jump has been appreciated by the PMO.

He said, “It’s not at all true, as reported recently, that [the BMC] Municipal Commissioner and Chief Secretary were pulled up by the PMO. It was a regular review meet, which the PMO holds every three to four months. In fact, I would say the PM has publicly appreciated the work done by Government of Maharashtra and the municipal corporation for a 30-point jump on the index of ease of business.”

World Bank disagrees

In a recent assessment of the State government’s performance, the World Bank contradicted its claim that business environment has ‘vastly improved’. It pointed out that dedicated commercial courts are few, and incomplete digitised land records count among hurdles to setting up new businesses. In all, 18 States are competing to join the 100% club based on a 372-point reform agenda put together by the World Bank and the Department of Industrial Policy and Promotion (DIPP).

BMC commissioner Ajoy Mehta had offered to link and digitise land records, while taking up the delay with the State Revenue Department. However, it lacks software to convert plot measurement figures into words. Mr. Mehta said, “Its just a matter of these two glitches. We are meeting the expectations of the PMO, which has appreciated us on record while asking Delhi to follow our way.”

Industry leaders say the government could do more in the areas of construction permits and online window systems. Niranjan Hiranandani, national president, National Real Estate Development Council, said, “Overall, things have improved, but more needs to be done. In the light of the PMO having taken up the issue with the BMC Commissioner and the State bureaucracy, one hopes that the process of ‘good’ being ‘better’ goes on to become ‘best’ in terms of ease of doing business, and timely permissions and clearances will be available at the earliest.”

Others feel business at the ground level must improve, and not just rankings. Shubika Bilkha, director, The Real Estate Management Institute (REMI), said, “The PMO has focused on improving India’s ease of doing business ranking and remains committed in its endeavour to accomplish a better rank. A recent perception report by the World Bank has highlighted some gaps in the ease of doing business ecosystem and has said the BMC has fallen short of expectations. The focus cannot be on rankings alone; it also has to be on improving processes for smoother functioning of work at the ground level. “ This can only happen if there is genuine commitment by all stakeholders to transactional transparency, swiftness or timeliness of approvals, limitations on unnecessary administrative processes and utilisation of technologies and digital platform for a seamless process.”