Ease of doing business: Karnataka govt to ask centre to reassess ranking

Bengaluru: The ease of doing business rankings survey has led to unease in yet another state capital.

Karnataka government officials on Wednesday said the state will ask the central government to reassess its ranking at the ninth position.

Prime Minister Narendra Modi’s home state Gujarat topped an official ranking of states measuring their success in rolling out regulatory reforms to facilitate the ease of doing business.

Maharashtra, which appeared at the eighth position, is planning a similar request for reassessment, Business Standard reported on Wednesday. While Maharashtra is ruled by Bharatiya Janata Party (BJP) and Shiv Sena—who also share power at the Centre—Karnataka is ruled by the Congress party.

The survey was sponsored by the department of industrial policy and promotion (DIPP), and conducted in association with World Bank and consulting firm KPMG.

R.V. Deshpande, Karnataka minister for large and medium industries and tourism, said the ranking does not seem to have considered several steps taken to improve ease of doing business across sectors; otherwise, he said, Karnataka would have been among the top states.

“We are shocked and surprised by the report’s findings. We totally do not agree to this report. We will ask for a reassessment,” said Deshpande.

He said since the Congress government came to power in the state in 2013, the state government’s single-window clearance system for industrial investment, the state high-level clearance committee (SHLCC) has cleared proposals worth ₹ 1,13,714 crore which created jobs for 175,318 persons.

Except for some permission procedures in the state’s pollution control board, labour department and the urban development department, most permissions in other departments have been streamlined and made available online, he added.

“Ease of doing business does not mean getting business. Making permissions available online is only a first step involved in the decision-making process. We are a heavily industrialised state. About 165 global companies have their headquarters here. We have a solid ecosystem for IT and start-up investments. Doesn’t that count?” asked Deshpande.

The minister mentioned that the state has set up Karnataka Information Technology Venture Capital Fund for start-ups, formulated a start-up policy and is in the process of setting up a start-up council.

“We have made available online where all land is available for investments in the state using GPS and GIS technology via Karnataka Industrial Areas Development Board website. It’s a major achievement,” said state chief secretary Kaushik Mukherjee. The effort to implement such a system is huge as it involves a lot of fieldwork and coordination among many departments, he added.

He complained that while the ranking team did not give adequate weightage to measures like these while ranking states for ease of doing business, it noted the absence of an online grievance redressal cell as a major default. “Is this comparable to not having a grievance redressal cell?” he asked.

“We asked for 66 points and they reduced some 30 points. Of course, we have a long way to go, but we are not this far in terms of investments,” he said.

Given below is the break-up of investments by SHLCC, according to the latest data released by the Karnataka government.

• During 2013-14, SHLCC approved 255 projects with an investment of ₹ 42,176.54 crore, generating employment for 1,71,451 persons.

• During 2014-15, it approved 108 projects with an investment of ₹ 54,433.01 crore, generating employment for 56,101 people, the statement said.

• So far in 2015, SHLCC has cleared two investment proposals worth ₹ 4,342 crore (aggregate of two major clearances of ₹ 3,783 in August and ₹ 559 in September) with a potential to create about 15,958 jobs in the state.