What else needs to be done to improve Ease-of-Doing-Business ranking? Centre yet to respond to Kerala's query

Kochi: The controversy over the Kitex Group's decision to back off from a proposed Rs 3,500-crore project in Kerala has rekindled a debate on the business atmosphere in the state. Talks over Kerala's abysmal rank on the ease-of-doing-business index has resurfaced with the Kitex row.

Kerala was ranked 28th in the central government's ease-of-doing-business ranking that came out last year. Disappointed to find it at the bottom of the list, the State had sought a clarification on the criteria adopted for assigning scores and ranks. Almost a year has passed since the state government raised its apprehensions, but the Centre is yet to reply.

Ease-of-Doing-Business (EODB) is a joint initiative by the Department for Promotion of Industry and Internal Trade (DPIIT) and the World Bank to improve the overall business environment in the states.

“Letters were sent to the Centre from the offices of the chief minister and the industries minister. We have not received any replies yet,” a top official in the state industries department told Onmanorama. He said apart from seeking a clarity on the criteria of ranking, the state government had also sought the details of the areas in which it scored less so that it could fill the gaps before the next ranking. The next ranking is likely to be published by early September.

“It is imperative to know what went wrong on the State's part in the feedback survey or implementation of the reforms. Then only we would be able to correct them in the subsequent exercises and move to better ranking and ensure better services to the entrepreneurs,” the official said.

The low-ranking has caused serious concerns as, according to officials, Kerala had put in place a string of progressive, investor-friendly measures between 2016 and 2018. It was even felt that Kerala had implemented over 80 percent of the missions laid down under the State Business Reform Action Plan, 2019, including pre-establishment approvals. Kerala government had drawn up and proactively implemented a slew of innovative measures during this period to make the State industry-friendly.

Some of the major steps taken by the government included announcement of an investor-friendly industrial policy. As many as seven acts have been amended to bring in the comprehensive Kerala Investment Promotion and Facilitation Act, 2018, which has made the investment process fast and transparent.

Other reform-oriented initiatives included the enactment of Kerala Micro Small Medium Enterprises Facilitation Act, 2019 that has considerably eased the investment procedures, including pollution control clearances.

Kerala State Single Window Clearance Board and Industrial Township Area Development Act was a decisive step forward that fast-tracked the investment process across the sectors.

The state has also launched the Invest Kerala portal and Kerala Single Window Interface for Fast and Transparent Clearance (K-Swift).

An industries department official had said in 2018 that the DPIIT had published details of the scores each state had achieved in various areas.

The state government, is expecting to improve its rank in the upcoming grading.

Kerala, for instance, had completed the 'Ease-of-Doing-Business' reforms stipulated by the the Department of Expenditure, Ministry of Finance, in January this year itself. This was also why Kerala, along with 11 other states, had become eligible to borrow an additional Rs 2,373 crore from the open market.

The state has also submitted the details of the beneficiaries of the reforms to the Centre, which is mandatory as part of the ranking exercise. The DPIIT will now pick some beneficiaries randomly and contact them to get their feedback about the government's services. The implementation of the reforms stipulated by the central government and the feedback survey play a crucial role in the ranking.

Ahead of the Centre's feedback survey, the state government is conducting a similar exercise. “We have already contacted over 26,000 beneficiaries through our call centres. This exercise is meant to get a feedback from the beneficiaries on the implementation of the reforms at the ground level. Along with that, we also sensitise the beneficiaries about the central government's feedback survey and tell them to expect a call from the Centre,” the official said.

“The DPIIT must be contacting the beneficiaries through call centres and some people refuse to attend such calls. If one doesn't respond to the call even after a couple of attempts, they are unlikely to contact that person again. Even that could affect our chances in the ranking,” the official said.