All the special attention to the single window system for ease of doing business by the government seems all in vain. A recent survey by Niti Aayog and IDFC Institute has brought out a revelation that only about 20 per cent of start-ups are using single window facilities introduced by state governments for setting up a business while a major crunch is yet completely unaware about the system’s existence.
“On average, only about 20 per cent of start-ups, which are of recent origin, report using single window facilities introduced by state governments for setting up a business. Even among experts, only 41 per cent have any knowledge of the existence of these facilities,” the survey report states.
The survey is a clear indication of lack of awareness among enterprises about State instituted policies and facilities revolving around ease of doing business.
Job providing labour-intensive firms have reported constrain due to labour related regulations. More of them report that finding skilled workers, hiring contract labour, and terminating employees are major and/or very severe obstacles.
Further, labour-intensive sectors also report significantly higher average time taken for environmental approvals, and more hours of power shortage in a month. Addressing these is likely to favourably impact the growth of labour-intensive sectors and hence job availability.
On a brighter side, the survey also reveals that newer and younger firms report a more favourable business environment in that they take less time in obtaining approvals. In addition, young firms report that most regulatory processes don’t constitute a major obstacle to doing business. These findings indeed point to an improvement in the business environment in recent years.
Basis the various findings, the survey report has penned down a few recommendations for future reforms:
- Enterprises need to be better informed about improvements in the ease of doing business
- In cases in which the lack of use of facilities is due to poor functioning of the service, the functioning must be improved
- Enhance flexibility of labour laws
- Facilitate firm entry and exit
- Level playing field for small and large firms
- Improving access to finance, etc.
The survey comprised 3,276 manufacturing enterprises, including 141 early stage firms. The enterprises surveyed were from 23 manufacturing sector categories. It focused on how organised manufacturing firms, rather than experts or implementing agencies, view the business environment in their respective states. In most cases, the findings are as expected. One major exception is with respect to enterprise size: the hypothesis that small enterprises with less than 50 workers are subject to less regulatory delays in the grant of permits and clearances finds at best weak support.
