Centre readies state test beds for business reforms
new delhi, Aug. 26 -- The Centre is working on a new model to roll out ease of doing business measures, with a focus on key states that are investment magnets: Gujarat, Maharashtra, Tamil Nadu, Karnataka and Delhi.
The next set of reforms to this end will be rolled out in these states, the people said, given their strong industrial base, proactive governance and track record in implementing business-friendly policies. The emphasis on select states is to create and showcase successful models that can be replicated across the country.
"The plan is to use these states as testing grounds for reforms designed to further reduce compliance burdens, speed up clearances, and strengthen investor confidence," one of the two people cited above said on the condition of anonymity. These states will be encouraged to mentor the laggards in framing policies to attract investment, set up manufacturing facilities, and generate employment, the second person added.
The plans come at a time when strained relations with the US, India's largest trading partner, have created an urgent need to revitalize domestic industry and attract foreign direct investment (FDI).
Tamil Nadu, with its strong manufacturing base, is expected to pilot faster clearances for micro, small and medium enterprises (MSMEs) in industrial corridors, whereas Gujarat could experiment with plug-and-play industrial parks and simplified green clearances. These state-level pilots, supported and benchmarked by the Centre, could then serve as templates for wider adoption across the country.
Maharashtra could serve as a pilot for streamlining industrial approvals in large urban clusters like Mumbai and Pune, while Karnataka may test digital labour compliances and online dispute resolution in line with its tech-driven economy.
Queries sent to the commerce ministry and the chief secretaries of the five states remained unanswered.
Even though ease of doing business reforms are designed at the central level, their real test lies in how states implement them, as most approvals related to land, labour, environment and local taxes fall under state jurisdiction. The Centre is likely to rely on competitive federalism by ranking states, linking incentives, and offering model frameworks for voluntary adoption of reform measures.
The development assumes significance given that the government has set a target of securing $100 billion in foreign direct investment in the current fiscal year....
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