With India looking to sustain a steady growth trajectory in 2022-23 supported by various dynamic reforms undertaken by the government during the last two years and efforts to ensure progress broadbased on its diversity, the assessment report of states/Union Territories based on implementation of the Business Reforms Action Plan (BRAP 2020) will be released by Finance Minister Nirmala Sitharaman on Thursday (30 June).
It is well timed to take stock of how India has translated its intent and plan to carry along its various states in creating an investment-friendly business climate in the country with the larger goal of ‘sabka saath, sabka vikas’ across the length and breadth of the country.
In March 2021, Finance Minister Sitharaman said that 20 states were found to have successfully completed ease of doing business reforms and were eligible for additional borrowing of 0.25 per cent of Gross State Domestic Product (GSDP).
More than a year later, the assessment report of states/UTs to be launched in the presence of Commerce Industry Minister Piyush Goyal, has much more packed in with 301 reform points covering 15 business regulatory areas such as access to information, single window system, labour, environment, sectoral reforms and other reforms spanning across the lifecycle of a typical business.
India's states and UTs have also been assessed on sectoral reforms which have been introduced for the first time in BRAP 2020, spanning 72 areas in nine sectors, namely, trade license, healthcare, legal metrology, cinema halls, hospitality, fire NOC, telecom, movie shooting and tourism.
The report has meticulously drawn from a feedback-based exercise by the DPIIT with inputs from businesses and the actual users of respective states/UTs on the quality of implementation of the reforms carried out in them.
The assessment report on implementation of BRAP 2020 comes opportunely with the states of the Indian economy witnessing significant developments in all economic and business spheres as well as an increasing competition to lure foreign companies with investor-friendly climate in their respective territories.
This was quite visible at the World Economic Forum in May 2022 with various Indian states making their presence felt in Davos.
The state of Karnataka, which is organising 'Invest Karnataka', a global investors' meet in November this year, showcased itself as home to five GI-tagged coffees, signed a memorandum of understanding (MoU) with Lulu International Group for an investment of Rs 2,000 crore and held talks with heads of Jubilant Group, Hitachi, Hero MotoCorp, Siemens, Dassault Systems and Nestle, among others.
The Government of Tamil Nadu held discussions with global companies such as Schneider and Flex and positioned itself as a destination for investment in high-tech systems. Andhra got a commitment from ArcelorMittal Nippon Steel India for an investment of Rs 1,000 crore to expand its pellet plant capacity in Vizag and also signed three MoUs for generating green energy.
India's quickening energy transition post-COVID with strong backing from policy enablers focused on improving ease of doing business, competitiveness and self-reliant supply chains, has made state governments critical in the effective adoption and implementation of policies enabling ease of doing business and competitiveness of energy transition, according to an EY-FICCI report on accelerating India's clean energy transition.
While the Green Hydrogen Policy notified in February 2022 is a timely intervention for the industry betting on its reduced cost of production, a lot will depend on states implementing these provisions effectively, points out Somesh Kumar, Partner and National Leader, Power & Utilities, EY India.
With investments and growth high on their radar, Indian states have lined up ambitious spends in their Budgets post two consecutive years of disruption caused by COVID-19 as they plan to leverage the fresh momentum in the economy in recent months to speed up their own recovery and move to a higher growth trajectory.
A report on state Budgets 2022-23 by PHD Chamber of Commerce and Industry (PHDCCI) shows Andhra Pradesh has significantly increased the size of its budget from Rs 208,107 crore for 2021-22 (Revised Estimate) to Rs 256,257 crore for FY 2022-23 (Budget Estimate), with an increment of 23 per cent, which is highest among the states of India.
The top 5 states with highest increase in size of their respective budgets in 2022-23 are Andhra Pradesh, Telangana with increment of 22 per cent, Odisha with an increment of 21 per cent, Haryana with an increment of 16 per cent and Madhya Pradesh with an increment of 14 per cent, according to the PHDCCI study.
On the other hand, Uttar Pradesh is on the top in terms of overall size of its Budget at Rs 545,371 crore in FY 2022-23 (BE), followed by Maharashtra with Budget size of Rs 495,405 crore, Rajasthan with Rs 346,183 crore, West Bengal with Rs 291,030 crore and Karnataka with Budget size of Rs 265,719 crore.
The report finds the states’ Budgets proactively and commonly focused on overall development, bolstering social welfare, spurring manufacturing sector, strengthening agriculture sector, vitalizing services sector and rejuvenating infrastructure activity along with provisioning for accelerating healthcare development, employment generation, protecting the vulnerable, empowering women and promoting education.
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