October 16, 2017

A Case for State-Level Enterprise Surveys

Resident Senior Fellow Vivek Dehejia, Visiting Senior Fellow Shamika Ravi and Junior Fellow Vaidehi Tandel make a case for State-level enterprise surveys to help ease of doing business, in this Hindu Business Line article. Excerpts below: 

 

"Given the downturn in economic growth and the daunting challenge of creating jobs for those already in and those about to enter the workforce in the country, the need to double down on bolstering the manufacturing sector has become exceedingly urgent...

 

The rub is that many of the regulations that affect businesses fall within the jurisdiction of State governments...

 

State governments have grasped the nettle and many are making earnest efforts to improve the ease of doing business. They have undertaken reforms across different areas of doing business, such as labour, environment, setting up a business, among others, in order to reduce the time and costs of meeting compliances...

 

...the DIPP survey only provides a part of the picture. To fully understand how business is actually done and whether reforms by States are being implemented, it is necessary to ask enterprises or firms themselves – who bear the burden of compliance – about their experience in meeting mandated requirements. This will provide direct feedback to State governments about how their actions are helping the situation on the ground. This would, therefore, be a complement, not a substitute, to DIPP’s survey...

 

Along the lines of these World Bank Enterprise Surveys, NITI Aayog, in collaboration with IDFC Institute, published a report based on a State-level enterprise survey of more than 3,000 manufacturing firms across India. The survey reveals a wide variation in the time taken for getting various approvals and cost of doing business across States. It also shows that although States have implemented reforms and instituted improved processes, enterprises are often unaware of them. The results confirm our most basic conjecture: States that experience high growth have a better climate for doing business, suggesting a virtuous circle between a better regulatory environment and more rapid growth.

 

Repeated surveys of enterprises at the State level will provide sufficient data to reasonably measure whether States that have a better doing business climate as reported by firms also see better outcomes over time. They will also allow States to check whether their reforms are yielding results, how far they have come, how they fare in relation to other states, and recalibrate the measures undertaken..."

 

Read the full article here

Topic : Transitions / In : OP-EDS
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