A survey on ease of doing business suggesting that it takes longer time to set up business in India than previous estimates is a research document and did not represent the views of the government, the Niti Aayog clarified today. Facing flak over the document it released yesterday on ease of doing business, the Aayog in a statement said this was based on an enterprise survey conducted jointly with the IDFC Institute. “The report itself states that it is meant to be a research document and its contents do not represent the views of the Government of India or Niti Aayog,” the statement said. The survey had stated that it takes 118 days on an average to set up a business in India. The findings were at sharp variance with the World Bank report, which showed that it took just 26 days to set up a business in India in 2016. While the World Bank’s ‘Ease of Doing Business’ survey, which ranked India at 130, was confined to just Delhi and Mumbai, the NITI-IDFC Survey covered 3,276 manufacturing enterprises spread across India. “The survey was conducted between April 2015 and April 2016 and does not reflect any changes in the ease of doing business since then,” the government think-tank said. Stating that there has been tremendous progress in easing various processes related to doing business in recent years, it said the enterprise responses were based on their past experiences and perceptions on doing business, “dating as far back as 10 years or more”. “Reforms such as single window clearance systems would not be applicable to many firms covered in the survey,” it said.
Stating that the survey only took inputs from firms in the formal manufacturing sector, the statement said, “It did not cover unorganised manufacturing and the services sector that constitutes the vast majority in India.” Further, the statement said it is important to note that the methodology of the present enterprise survey differs from that of the World Bank’s doing business survey. According to the statement, the survey found that firms in many states are taking considerably less time in obtaining approvals than reported by the World Bank data. “On average, firms reported taking far less time in getting construction permits,” it observed. Overall, the statement asserted that the Niti Aayog-IDFC Institute Ease of Doing Business report shows that many of the actual experiences of enterprises are better than expert perceptions reported in past surveys. Yesterday, the Niti Aayog-IDFC Institute Ease of Doing Business report had said that India needs to reform with alacrity with a view to improving ease of doing business as it is the best way to eradicate poverty and give millions a chance for better life.
It had also made a strong case for labour reforms, easier entry and exit of firms and level-playing field for small and larger enterprises. Referring to labour reforms, the report had stated that reforming labour laws and achieving greater flexibility in their implementation can greatly help enhance the ease of doing business. “According to our survey’s finding, firms in labour- related regulations particularly are onerous. This fact translates into enterprises avoiding labour-intensive sectors,” the report had noted.