The government has completed, for the first time, a “cost of regulations” study — cost paid by a company to access 13 services for business purposes in a state — and has found Rs 21 lakh as the average cost, Department for Promotion of Industry and Internal Trade secretary Rajesh K Singh said on Saturday.
“DPIIT has completed for the first time in India a cost of regulations study. There are tremendous variations across the country when it comes to 13 services we have tried to cover.
“In one state, it may be Rs 50 lakh for accessing these 13 services, on an average; in another, it may be as low as Rs 15 lakh, but the average (across all states and UTs) is Rs 21 lakh for a company to access these services,” Singh said.
“(We hope) the data will enable states to do a self-assessment of the cost of regulations, and encourage them to reduce it,” he said, while adding that the 13 services include electricity, water supply, land and property. The study will be published in the coming months by DPIIT.
Singh also asked the private sector to raise its spending on research and development (R&D), so that it can increase its investments in the economy.
Currently, India spends about 0.7% of its Gross Domestic Product (GDP) in R&D, and almost all of it is spent by the government, the private sector is not contributing. “We will do what we can through several initiatives like Make in India, PLI (production-linked incentive scheme) to support you… so that you can start providing that investment to create India into a manufacturing powerhouse,” he said.
Singh mentioned that the government’s vision is to make India a $32 trillion economy in the next 25 years — in which the share of manufacturing should be 25%, much higher than around 15% at present.
“The problem with the GDP composition is that it creates a tremendous amount of underemployment in the agriculture sector. The only way we can address this is by large scale industrialisation, and that’s where we need to focus on,” he said.
Moreover, Singh said that the government will try to do its best in terms of ease of doing business and ease of living through further moves to decriminalise several laws to ensure that purely technical violations of the law are not punished by criminal statute.