Indian firms get approvals faster than World Bank suggests: NITI Aayog

Arvind Panagariya
Arvind Panagariya

New Delhi : Enterprises in India take considerably less time in obtaining approvals than reported by the World Bank data, the NITI Aayog said on Tuesday.

According to the NITI Aayog’s “Ease of Doing Business” survey, which covered over 3,000 enterprises, the average time taken to set up a business in India was 118 days. For construction permits, it took even lesser time with an average of 112 days, the survey report said.

“In some states such as Madhya Pradesh and Bihar, getting a construction permit takes even fewer days,” the Aayog said in a statement.

However, according to the World Bank’s 2017 Doing Business report, the time taken for getting construction permits was 190 days, it said, adding: “Thus, it appears that the actual experience of enterprises is better than the survey results of the World Bank.”

“Similarly, on average, it took enterprises about half the time to resolve legal disputes as was reported in the World Bank Survey,” the NITI Aayog statement said.

While the World Bank Survey focuses on industry leaders from Delhi and Mumbai, the survey by the NITI Aayog covers firms, start-ups and experts from almost all states and union territories in India.

However, there is a wide variation across states with Madhya Pradesh and Bihar taking 41 and 43 days respectively to get construction permits, while Assam took 270 days.

“The survey indicates that the government’s efforts to improve business environment are showing results on the ground,” the NITI Aayog said.

It added that the experiences of start-ups started since 2014 suggested a significant improvement in doing business.

“Newer and younger firms take less time in obtaining approvals, highlighting a favourable business environment. Young firms report that most regulatory processes do not constitute a major obstacle to their doing business,” it said.

It added that enterprises in high-growth states are significantly less likely to report major or very severe obstacles in land and construction related approvals, environmental approvals and water and sanitation availability as compared to enterprises located in low-growth states.

“Enterprises in high-growth states also report taking less time on average for nearly all aspects of doing business,” it said.

The NITI Aayog survey, conducted between April 2015 and April 2016, only takes inputs from firms in the formal manufacturing sector. It does not cover unorganized manufacturing and the services sectors that constitute the vast majority in India.

While the World Bank Survey covers 10 parameters handled by the states and the central government, this survey primarily deals with issues handled by the state governments.



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