NITI Aayog Survey Recommends Power Reforms

Reforming labour laws, boosting flexibility in their implementation and accelerating power sector reforms can enhance ease of doing business, according to the govt's policy think-tank NITI Aayog. It launched the Ease of Doing Business report based on an Enterprise Survey of 3,500 manufacturing firms across all states and UTs. The survey was conducted along with the IDFC Institute, to assess the business regulations and enabling environment from the viewpoint of CoS. The report proposes reforms to facilitate doing business and creating a supportive ecosystem. The policy think-tank, in its report, put forth its recommendation for future reforms ranging from level playing field for small, large firms, improving CoS' access to finance to need to be better informed about policy changes. Firms in labour-intensive sectors such as textiles, find compliance with labour-related regulations particularly arduous, the think tank said, adding that this leads to firms avoiding the labour-intensive sectors. Similarly, facilitating power sector reforms will ensure that power-intensive CoS have access to steady and uninterrupted power without undue delays or regulatory burdens, it said. On an average, high-growth states report monthly power shortages that are ten hours less than those reported by low-growth states. However, action on power sector reforms would be dependent on respective states, NITI Aayog said, emphasizing on the fact that as India is increasingly becoming power surplus, states have the opportunity to use this to their advantage to lower electricity costs and making it available faster and more reliably by opening up the distribution sector for competition and improving their regulatory capacity. The survey shows that there is a wide gap between what enterprises know and what the govt officials say they have done to improve procedures related to various permits and clearances. Information should be communicated in a way that firms are aware of ways to ease the compliance burden of regulation, such as access to single clearance windows, and are able to yield substantial gains in productivity at relatively low costs, it suggested.