TOWARDS  AN  OPTIMAL  BUSINESS  

REGULATORY  FRAMEWORK  IN  INDIA  
 

Report  of  the  Implementation  Group  

XII  Five  Year  Plan  

 
 
 
 
 
 
 
 
 
 
 

 
 
   

 
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FOREWORD  
 
India  is  widely  accepted  as  a  difficult  place  to  do  business,  particularly  manufacturing.  Given  the  national  
objective   of   increasing   the   rate   of   growth   of   the   Manufacturing   sector   substantially   to   increase  
employment   and   reduce   the   country’s   trade   imbalance,   a   concerted   effort   is   required   to   improve   the  
overall  business  regulatory  framework.  
 
Several  studies  have  been  made  in  the  past  comparing  the  attractiveness  of  countries,  and  states  within,  
for   business   investment   and   growth.   Needless   to   remind   that   India   has   fared   very   poorly   in   all.  
Government   has   a   responsibility   to   provide   both   encouragement   as   well   as   oversight   to   business,   which  
it   provides   through   a   set   of   policies,   laws,   and   practices,   and   the   institutions   that   administer   these   laws.  
However,  a   host  of  policy  and/or  law  induced  impediments,  contra-­‐indications,  and  distortions  continue  
to  exist  and  adversely  impact  manufacturing  sector  competitiveness  of  India.  These  point  to  the  urgent  
need  of  improving  the  overall  interface  between  government,  industry  as  also  other  stakeholders  so  as  
to  enable  each  to  perform  their  appropriate  functions,  and  contribute  to  national  competitiveness  and  
prosperity.  
 
The  objective  of  the  present  study,  undertaken  by  the  Planning  Commission,  was  to  determine  what  can  
be  done  to  make  these  improvements  in  a  practical  manner.  Many  agencies  are  involved,  and  moreover  
many  stakeholders’  needs  must  be  met  while  ‘tuning  up’  the  regulatory  frameworks.    Booz  &  Company  
assisted   the   Planning   Commission   in   this   exercise,   the   objective   of   which   was   to   create   a   process   and   to  
point   to   paths   for   implementation   of   the   improvements   most   necessary   at   this   time.       The   resulting  
report  contained  here  specifically  builds  on  the  past  work  done  by  the  Working  Group  that  had  been  set  
up   for   examining   the   Business   Regulatory   Framework,   as   part   of   the   12th   Plan,   as   well   as   other  
committees  of  the  Government  of  India.  The  formulation  of  this  report  was  also  marked  by  a  series  of  
wide  ranging  consultations  undertaken  with  the  various  stakeholders,  including  government,  academia,  
industry   associations   as   well   as   various   companies   in   order   to   sharpen   the   areas   of   focus   and   lay   out   an  
implementation  process.    
 
In   addition   to   recommending   some   specific   themes   and   actions,   care   has   been   taken   to   include  
institutional   strengthening   mechanisms,   so   as   to   enhance   capabilities   of   undertaking   continuous  
improvement  of  the  overall  business  climate  at  a  systemic  level  
 
We  hope  this  exercise  provides  not  just  a  useful  roadmap  to  undertake  an  overall  improvement  in  the  
business   regulatory   framework,   but   also   a   useful   template   for   similar   such   exercises   in   other   areas   of  
intervention.  
   

 
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TABLE  OF  CONTENTS  

 

Foreword  ................................................................................................................................  1  
1.  Towards  Optimal  Business  Regulatory  Governance  in  India  ................................................  3  
2.  Building  a  Positive  Business  Regulatory  Framework  for  Space  /  Land  ................................  11  
3.  Streamlining  Business  Regulatory  Framework  via  Single  Window  Clearance  .....................  15  
4.  Streamlining  Environment  Regulations  .............................................................................  19  
5.  Streamlining  Labor  Regulations  ........................................................................................  23  
6.  Streamlining  Contract  Enforcement  ..................................................................................  27  
7.  Exit  Framework  in  India  ....................................................................................................  30  
Conclusion  ............................................................................................................................  31  
 

 
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1.  TOWARDS  OPTIMAL  BUSINESS  REGULATORY  GOVERNANCE  IN  INDIA  

 

Context  

Manufacturing  and  Industrial  Strategy  is  a  key  area  of  focus  in  XII  FYP  for  the  Government  of  India.  In  
this  regard,  the  Planning  Commission  is  focused  on  a  number  of  cross  sectoral  issues  of  core  importance,  
of  which  the  business  regulatory  framework  is  an  important  part.    

A   regulatory   environment   is   essential   to   ensure   just   and   sustained   business   development.   As   a   first   step  
to  engineer  a  robust  regulation,  its  objective  should  be  well  defined  along  with  timelines  to  deploy  an  
agenda  driven  approach.  To  simulate  and  institutionalize  the  same,  requisite  policies  should  be  laid  out  
with   the   establishment   of   empowered   institutions,   having   clarity   and   objectivity   in   their   approach.  
Policies   so   formulated   should   furnish   unambiguous   rules   to   ensure   seamless   execution   of   the   entire  
process.  Once  government  formalizes  a  regulation,  a)  step-­‐by-­‐step  procedures,  requiring  adherence  and  
b)   practices,   requiring   compliance,   should   be   detailed   out.   A   good   Business   Regulatory   Framework  
(BRF),   so   deployed,   should   be   collectively   relevant,   mutually   consistent   and   independently   efficient   to  
realize  the  set  goals  so  envisioned.  Such  a  process  for  tuning  up  the  business  regulatory  environment  is  
required  in  the  States,  as  well  as  the  Center.    

Components  and  Description  

The  business  regulatory  framework  of  any  jurisdiction  typically  consists  of  six  elements:  

• Objectives  and  timelines  i.e.  the  ambition/  vision    

• Policies,  which  are  articulated  to  drive  the  objective(s)  
• Institutions  tasked  to  formulate  and  administer  the  rules  required  to  implement  the  policy  
• Rules,  formulated  to  implement  the  policy  
• Procedures/  guidelines  laid  out  to  adhere  to  the  rules  
• Practices  adopted  by  the  governing  institution  to  monitor  implementation  of  the  rules    

A  good  business  regulatory  framework  is  one  which  is  consistent  (both  horizontally-­‐  how  consistent  are  
the  various  objectives  and  policies;  as  well  as  vertically-­‐  spanning  the  six  components);  relevant  to  the  
times  and  the  intent;  and  efficient  (Exhibit  1)  

 
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Exhibit 1: Business Regulatory Framework

BRF consists of six components, all of which must be consistent,

relevant and efficient
Criteria to Assess BRF

Objectives and
!  Evaluating the rationale behind the
Timelines
policy is critical, because with time the
relevance of policies may change
!  Ensuring that rules, procedures and
Policies practices are relevant to achieve the
1 Relevance
overarching objective

Institutions !  Ensuring alignment across the layers

of policies, procedures and practices
Assessment
2 Consistency !  This is key to ensure that all
Criteria components support the overarching
Rules objective of the policy

!  Due to the vastness and complexity of

Procedures 3 Efficiency
the system, it is subject to several
inefficiencies
!  Improving implementation efficiency of
various procedures and practices is a
Practices must

Source: Booz & Company analysis

 
Booz & Company Prepared for Planning Commission

Methodology  &  Areas  of  Analysis  

The  criticality  of  improving  the  BRF,  given  its  role  in  improving  the  overall  manufacturing  ecosystem,  was  
recommended   by   the   Working   Group   of   the   Planning   Commission   as   a   part   of   the   formulation   of   the   XII  
FYP.   The   Planning   Commission,   in   partnership   with   Booz   &   Company,   subsequently   undertook   to  
develop  the  main  areas  of  focus,  and  the  implementation  plan  for  the  selected  focus  areas  

Measures   of   regulatory   burden   on   industry   are   widely   studied,   both   in   India   as   well   as   overseas.  
However,   these   at   times   may   not   be   completely   relevant   to   the   Indian   context,   or   refer   to   symptoms   as  
opposed  to  root  causes.  In  order  to  highlight  the  areas  of  fundamental  importance  within  the  context  of  
the  Indian  situation,  the  Planning  Commission  undertook  a  three  step  process  to  select  the  focus  areas  
as  well  as  derive  the  approach  and  the  institutional  framework  to  drive  the  improvements    

• The  long  list  of  areas  (~  20)  was  selected  based  on  a  number  of  empirical  studies  and  which  span  
across  all  three  stages  of  an  enterprise-­‐  incorporation  and  set-­‐up,  ongoing  operations,  and  exit;    
• The  list  was  further  evaluated  on  the  following  criteria:    
o relevant  to  manufacturing,  in  particular  small  enterprises;  consistent  with  the  intent  to  
promote  manufacturing  
o have   noticeable   impact,   in   terms   of   current   compliance   efforts   and   any   change   has   a  
material  difference  to  the  overall  costs  and  perception    
o quantifiable,  such  that  the  impact  could  be  measured  
 

 
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o measurable,   in   as   such   that   they   were   already   being   tracked   on   a   regular   basis   by  
existing   agencies,   such   that   there   is   independent   and   verifiable   time   series   data  
available  to  measure  progress/  change  over  time  
• In   parallel,   an   extensive   interaction   process   was   undertaken   with   multiple   stakeholders,  
spanning   government,   industry   associations,   research   institutions,   etc   as   well   as   industry  
directly,  in  order  to  ensure  that  the  areas  of  focus  were  adequately  representative          

Arising  out  of  the  above  interactions,  six  focus  areas  which  impose  the  maximum  regulatory  burden  on  
business,  spanning  across  its  stages  of  incorporation,  ongoing  operations,  as  well  as  exit,  were  selected  
(Exhibit  2),  as  well  as  four  themes  which  we  believe  should  form  the  basis  of  the  overall  review  

The  six  focus  areas  consist  of    

1. Access  to  space/  land  

2. Single  window  clearance    
3. Environmental  clearances  
4. Labour  
5. Enforcing  contracts  
6. Exit  

Exhibit 2: Six areas were found to impose the maximum burden

Fishbone: Cause and Effect Analysis

Environment Enforcing
Access to Space
Clearances Contracts
Lack of Procedures
institutional not clearly Low efficiency
Laws prescribe Capacity of of the process
support laid out
Not Available process instead courts / judges
Complex of outcome
Laws Procedural
Not Accessible
Delays
Speculative Corruption in
Dated laws, not Lack of
Pricing Lack of planned Inspection
accounting for systematic case
spaces for Process management
MSMEs technology evolution
Not Affordable system
Regulatory Burden
on Manufacturing
Multiplicity of Loss of Lack of Sector in India
authority
Lack of Several inspections Productivity
transparency formalities may in Disputes Inefficient Very severe
be redundant Administrative revival legal recourse
Lack of for entrepreneur
Burden institutions for process
Lack of authority Low efficiency
over underlying dispute resolution Lack of bankruptcy
in processes Delays in
windows Frequent policy / laws
Dated laws pose SLIIC
form filings
process
Significant paperwork disproportionate Lack of
involved, scope for institutional
burden on MSMEs
leveraging IT support for
MSMEs
Single Window Labor Regulations Exit

Source: Booz & Company analysis

  Booz & Company Prepared for Planning Commission

Themes  

Any  revision  of  the  regulatory  framework,  and  drawing  up  of  any  future  regulation,  may  wish  to  consider  
adhering  to  the  following  four  themes:  
 

 
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• Quality:  Regulations  must  be  clearly  articulated  and  analyzed  for  intended  benefits  vs.  perceived  
costs  to  reduce  the  regulatory  burden  on  business  entities.  A  widely  accepted  measure  to  assess  
the   quality   of   a   proposed   (or   existing)   regulation   is   Regulatory   Impact   Analysis   (RIA).   As   an  
example,  Mexico  in  1995  launched  “The  Agreement  for  Deregulation  of  Business  Activity”  which  
assessed   existing   legislation   for   legal   and   economic   justification,   positive   and   negative  
outcomes,  as  well  as  the  human  and  budgetary  requirements  for  implementation.  The  exercise  
resulted   in   review   and   revision   of   nearly   95%   of   the   regulations,   with   an   estimated   ~   40%  
reduction   in   either   their   scope   or   mandate.   RIA   as   a   tool   has   also   been   recommended   by   a  
number  of  government  studies,  including  most  recently  the  XII  FYP  Working  Group    
 
• Quantity:   or   reduction   thereof.   Regulations   build   up   over   time   and   frequently   outlive   their  
utility,  and  a  periodic  culling  exercise  offers  immediate  and  significant  scope  for  improvement.  
As  a  trivial  example,  hotels  in  India  are  subject  to  the  Innkeepers’  Act,  which  requires  till  today  a  
bucket   of   water   and   hay   to   be   “readily   available”   at   all   times!   To   address   such   issues,   South  
Korea   in   1998   introduced   the   Presidential   Regulatory   reforms   Commission,   and   each   Ministry  
was   given   a   guillotine   mandate   of   reducing   their   existing   regulations   by   50%.   The   RRC,   in  
consultation  with  the  ministries,  was  tasked  to  eliminate  any  regulations  which  hindered  market  
access   or   competition,   while   simultaneously   strengthening   those   relating   to   environment,  
health   and   public   safety.   The   exercise   resulted   in   scrapping   of   an   estimated   35%   of   all  
regulations   and   is   seen   to   have   contributed   significantly   to   South   Korea’s   industrial   and  
innovation  progress  over  the  last  decade  
 
• Avoiding   numeric   thresholds:   institution   of   numeric   thresholds   in   application   of   law,   while  
perhaps  impossible  to  completely  eliminate,  has  had  noticeable  unintended  social  and  industrial  
consequences.  Numerous  studies,  by  both  Indian  and  American  academia,  have  attested  to  the  
tendency   of   Indian   industry   to   “start   small   and   remain   small”,   unlike   even   similar   economies  
such  as  Mexico  and  Brazil,  where  firms  largely  either  exit  or  grow  with  time.  This  is  estimated  to  
have   a   direct   link   to   the   SME   thresholds   which   define   the   eligibility   of   various   incentives   and  
offers   a   perverse   incentive   to   remain   small;   and   are   perceived   to   negatively   impact   capital  
formation,   technology   intensity   and   competitiveness.   Similarly,   thresholds   for   applicability   of  
taxation,  and  occupational  safety  and  health  provisions  based  on  number  of  people  employed,  
to   cite   two   additional   instances,     is   widely   perceived   to   have   contributed   to   the   widespread  
existence   of   the   “informal”   sector.   As   a   result,   an   overwhelming   majority   of   the   labour  
continues   to   work   in   unsafe   conditions   and   with   no   social   security   net   or   other   social   safety  
features  of  the  government  
 
Removing   numeric   thresholds   completely   may   be   neither   possible   nor   desirable,   as   there   is   a  
legitimate  need  to  offer  growth  incentives  to  infant  industries.  As  an  alternate,  there  may  be  a  
strong   case   to   have   “secular”   thresholds   such   as   time,   or   initial   investment   quanta,   which   are  
easily  verifiable.  Incentives  may  be  offered  for  a  limited  period  of  time  and/or  based  on  initial  
capital  investment,  rather  than  linking  it  to  cumulative  capital  invested,  turnover  or  employment  
 

 
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numbers.   That   would   serve   the   purpose   of   offering   shelter/   beneficial   terms   to   infant   industries  
while  removing  any  perverse  incentive  to  continue  remaining  small  and  beyond  the  application  
of  any  social  laws.    
We   also   recommend   that   there   be   no   exemption   from   adherence   or   even   oversight   for   any  
social  or  tax  measures,  as  these  are  universal  in  nature,  and  any  exemption  represents  dilution  
of  the  social  compact  of  the  state  to  those  employed  in  such  establishments    
 
• Transparency   and   consistency:   More   than   any   specific   requirement,   unpredictability   of  
regulation,   or   changing   of   policies   mid-­‐way,   has   a   more   deleterious   impact   on   the   perception   of  
ease  of  doing  business.  This  can  be  addressed  by  taking  steps  to  increase  level  of  transparency  
in   public   governance,   both   in   terms   of   policy   making   (i.e.   avoiding   retrospective   changes   or  
application   of   law)   as   well   as   in   terms   of   governance,   by   making   procedures   transparent   and  
uniformly   applicable.   Not   just   business,   but   also   citizens,   should   be   able   to   get   upfront   and  
accurate   information   of   the   various   requirements,   documentation,   and   procedures   of   the  
applicable   regulations.   Various   e-­‐gov   initiatives   already   exist   and   should   be   implemented  
uniformly   to   ensure   such   transparency.   Successful   but   isolated/   incomplete   examples   in   the  
business  sphere  already  exist  in  India,  such  as  Maharashtra’s  Maha-­‐e-­‐biz  portal  
   

Metrics  

Measuring  progress  in  improvement  of  both  the  processes,  by  which  these  regulations  are  administered  
as  well  as  the  outcomes,  requires  both  input  and  output  metrics.  Further,  in  order  for  the  exercise  to  be  
sustainable,  and  the  results  for  which  are  to  be  visible,  the  process  of  selection  of  the  metrics  for  each  of  
the  six  focus  areas  was  subject  to  the  following  four  criteria:  

• Easy   to   understand:   Quantitative,   easy   to   compute   and   well   defined   metrics   (i.e.   the  
components  of  which  are  easily  understandable  and  traceable)  lend  themselves  to  widespread  
acceptability  and  remembrance    
• Widely  accepted:  the  requirement  for  change,  as  well  as  the  progress  thereof,  is  easier  to  accept  
and  for  monitoring  progress  if  the  metrics  are  widely  accepted  as  relevant  and  legitimate  
• Uses   existing   indicators:   Using   existing   indicators   minimizes   the   cost   (time   and   money)  
associated   with   gathering   data   for   a   new   metric   or   using   a   new   methodology;   further,   it  
maintains  focus  on  interpretation  and  action,  rather  than  computing  the  indicator  itself  
• Available   in   chronological   time   series: To   enable   measuring   improvement   over   time,   it   is  
important   that   the   assessment   be   periodic,   which   can   be   achieved   by   deriving   the   metrics   using  
periodically  reported  metrics  

 
 

 
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Arising  out  of  the  above  exercise,  the  metrics  for  each  focus  area  are  proposed  as  follows:  

#   Focus   Input  Metric(s)   Output  Metric(s)   Description  

Areas  

1   Access  to   Amount  of  industrial   Change  in  number  of   As  a  significant  majority  of  
land/  space   space  (in  sq  m)   unorganized   enterprises  are  estimated  to  be  in  
including  flatted   manufacturing   the  informal  sector,  growth  in  the  
factories  available  in   establishment  as   number  of  enterprises  registered  
urban  areas   estimated  by  NSS   would  indicate  the  ease  of  
registration,  which  is  a  derivative  
of  available  “industrial”  space  

2   Single   “Time  taken  to  start  a   Change  in  number  of   SWC  is  primarily  aimed  at  reducing  
Window   business”  as  measured   unorganized   the  start-­‐up  time  for  businesses  by  
Clearance   by  the  World  Bank-­‐   manufacturing   provisioning  the  required  
Ease  of  Doing  Business   establishments  as   approvals  and  licenses  over  a  
survey   estimated  by  NSS   single  window  

3   Environment    

One  time   Longest  time  taken  for     State  PCBs  are  meant  to  issue  
NOC   Environment  NOC  to  enterprises  
not  on  the  sensitive  list,  which  
should  cover  a  majority  of  
enterprises,  which  are  supposed  to  
be  tracked  and  published  on  the  
relevant  PCB’s  websites.  This  may  
also  be  monitored  by  the  proposed  
NEAMA.  Further,  tracking  of  the  
longest  time  rather  than  average  
will  allow  for  the  worst  
performances  to  be  improved  

Ongoing     Ambient  Air  and   Currently,  the  Environment  Act  

water  Quality   defines  the  process  of  pollution  
control,  which  hinders  any  
improved  process  and  allows  for  
harassment.  Focus  should  instead  
shift  to  making  the  PCBs  
responsible  for  overall  air  and  
water  quality,  which  should  be  
tracked  by  independent  accredited  
 

 
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third  parties  and  through  social  

audits  

4   Labour   “Difficulty  in  hiring   Increase  in  absolute   Increasing  employment  is  one  of  
and  removing   number  of  employed   the  key  objectives  of  the  XII  FYP,  
workers”  as  reported   workers  as  reported   and  the  two  metrics  proposed  
by  the  World  Bank’s   by  Annual  Survey  of   herein  would  allow  for  both  
Ease  of  Doing  Business   Industries,   improvement  in  the  process  of  
Government  of  India   hiring  as  well  as  the  outcome  

5   Enforcing   Time  taken  to  resolve   Contract    

Contracts   a  commercial  dispute   enforcement  cost  as  
through  courts,  as   %  of  claim  value,  as  
measured  by  World   reported  by  World  
Bank’s  Ease  of  Doing   Bank’s  Ease  of  Doing  
Business   Business  

6   Exit   Time  taken  to  recover   Productivity  of   • Recovery  of  debt  is  a  critical  
debt,  as  reported  by   Capital,  as  based  on   indicator  in  the  freedom  of  
World  Bank’s  Ease  of   the  survey  done  by   creditors  to  seek  windup  of  a  
Doing  Business   Annual  Survey  of   non-­‐performing  company,  and  
Industries,   ensuring  that  business  remains  
Government  of  India   competitive  
• If  the  exit  mechanism  is  
effective,  productivity  of  
capital  should  show  an  increase  

   

 
   10  

Focus  Areas  

In   making   the   recommendations   for   each   focus   area,   the   Planning   Commission   has   consciously  
eschewed   any   specific   subject   matter   perspective   or   recommendation.   The   work   in   each   of   the   focus  
areas  has  been  limited  to  making  the  initial  case  for  change  in  the  context  of  the  overall  XII  FYP  vision  as  
and   if   required,   specifying   the   institutional   framework(s)   to   drive   change   on   a   sustained   basis   in   each  
area,   and   mapping   the   stakeholders   necessary   for   driving   this   change.   In   addition,   an   indicative   draft  
timeline   and   sequence   of   interactions   to   commence   the   change   process   has   been   included   to   help  
initiate  the  process    

The  succeeding  pages  lay  out  the  detailed  case  for  change,  the  stakeholders  involved  in  each  focus  area,  
as  well  as  the  suggested  sequence  of  interactions  and  timelines  for  implementation,  for  each  of  the  six  
focus  areas:  

• Access  to  Land/  Space  

• Single  Window  Clearance(SWC)  
• Environment  
• Labour  
• Enforcing  Contracts  
• Exit  
 
 

   

 
   11  

2.  BUILDING  A  POSITIVE  BUSINESS  REGULATORY  FRAMEWORK  FOR  SPACE  /  LAND  

 

Context  

BRF  spans  multiple  aspects  of  entry,  operations  and  exit  step  of  the  businesses.  Particularly,  land  /  space  
regulations   affect   the   entry   phase   and   are   perceived   as   most   complex   and   nontransparent.   Industry   can  
acquire  land  either  directly  from  a  land  owner  or  from  the  state  government  (SIDCs).  Former  should  be  
kept   independent   of   the   state   government,   driven   entirely   by   the   willingness   of   landowner   to   sell   the  
land  as  per  the  prices  offered  by  a  private  player.  However,  it  is  rare  to  get  a  contiguous  set  of  land  for  
acquisition;   hence,   industry   seeks   assistance   from   the   government.   Government   acquires   land   from  
multiple   sources   under   the   land   acquisition   act   and   allots   them   further   for   industrial   or   other   public  
purposes.   However,   acquisition   has   faced   multiple   resistances   due   to   unattractive   resettlement  
proposition   offered   to   the   land   owners.   Hence,   the   process   in   itself   suffered   many   blows,   both   by,   as  
perceived,  controversial  acquisitions  and  inefficient  allotments.  

Acquiring   land   /   space   is   a   challenge   for   manufacturing   units,   barring   them   to   get   access   to   legal  
operating   space,   evident   from   the   fact   that   bulk   of   the   units   are   under   unorganized   category   (~99%  
were  classified  as  unorganized  units  in  2005-­‐06  as  per  ASI).    A  third  of  the  11  million  civil  cases  (2010)  
are   on   land   disputes   and   industrial   projects   worth   $100   B   are   held   up   due   to   these   conflicts1).   The  
fundamental  problems  in  space  /  land  could  be  classified  as:  

• Land  Availability  –  Unclear  land  ownership  /  title  

• Land  Accessibility  –  Inflexible  land  use  and  resistance  in  transfer  /  conversion  of  land  

• Land  Affordability  –  High  transaction  cost  in  the  form  of  stamp  duties  and  speculative  pricing  

Key  Challenges:  

Critical  challenges  inflicted  on  the  private  players,  as  diagnosed  under  the  ambit  of  a  good  BRF  are:  

• Ineffective  functioning  of  SIDCs  (state  government):  

o Procedural  delays  in  acquisitions  and  subsequent  land  allotments  

o Unavailability  of  accurate  and  exhaustive  land  data  

o Limited  role  in  facilitating  acquisition  for  industry  

• Ineffective  procedures  &  practices  

o Complicated  land  allotment  procedure  and  non-­‐transparent  pricing  mechanism  

 
   12  

In   totality,   land   availability,   accessibility   and   affordability   issues   must   be   addressed   and   relevant  
regulatory   pillar   must   be   restructured   to   institutionalize   the   same,   without   comprising   any   benefits   to  
the  landowners.  

Exercising   institutional   reforms   could   wipe   out   the   procedural   delays   and   non-­‐institutional  
recommendations  could  facilitate  regulatory  and  processes  restructuring.    

Institutional  Recommendations:  

I) Governance  &  Transparency  in  SIDCs  –  Resolving  Land  Allotment  Issues  

Post   land   acquisition,   SIDCs   should   work   towards   accelerating   the   allotment   process   by   keeping   it  
transparent  under  well-­‐defined  timelines.    

• Well-­‐defined   roles   and   responsibilities   –   Roles   and   timelines   should   be   well   defined   to   ensure  
unambiguous   functioning   of   the   authority.   Also,   to   enable   other   functioning   such   as   a   facilitator  
when  industry  acquires  a  land,  ensure  smooth  land  conversion,  resolve  any  other  land  disputes  
proactively   whenever   an   industry   is   involved,   keeping   in   mind   the   “value   for   owners”  
philosophy.   GIDC   defines   its   role   as   the   only   acquirer   of   land   for   industrial   use.   Outside  
“specified  lands”,  no  state  support  while  procuring  private  land  for  industry  

• Resolving  titling  issues  upfront  &  Creation  of  land  banks  –  Respective  SIDCs  should  conduct  land  
surveys   in   their   respective   states   to   record   the   land   data   exhaustively   and   remove   ambiguity  
around  titles  along  with  the  help  of  ULBs  (Urban  Local  Bodies).  GIDC  maintains  a  comprehensive  
land   database   for   industry   called   Investor   Support   System   (ISS)   and   drives   a   strong   thrust   in  
identifying  dry,  waste  and  idle  land  for  acquisition  upfront.  

A  nationwide  rollout  of  UPOR  (Urban  Property  Ownership  Record),  as  implemented  by  ULBs  in  
Karnataka   (Mysore,   Shimoga,   Bellary,   Mangalore,   Hubli-­‐Dharwad,   Bengaluru),   could   provide   a  
robust   framework   in   addressing   this   problem.   Bhu   Bharti   is   another   initiative   undertaken   by  
NISG  in  Andhra  Pradesh  to  come  up  with  a  comprehensive  land  management  system.  

• Transparent   land   pricing   mechanism   –   An   independent   body   should   be   assigned   for   designing  
the   pricing   mechanism   for   both   acquisitions   and   allotments   under   “value   for   owners”  
philosophy.   Center   for   Environment   Planning   and   Technology   University   (CEPT)   is   an  
independent   body   assigned   by   GIDC   to   decide   the   land   pricing.   Also,   LARR   2011   proposes  
Collector  to  be  responsible  for  estimating  land  value  per  market  prices.  

Non-­‐institutional  Recommendations:  

I) Policy  Levers  –  Resolving  Land  Acquisition  Challenges  

• Provision   to   allow   private   players   to   create   their   own   industrial   estates   as   per   “value   for  
owners”  philosophy  

 
   13  

• Center  to  pass  directives  for  building  flatted  factories  over  acquired  industrial  estates  in  urban  
areas  for  MSMEs  and  a  provision  for  private  players  to  build  the  same  by  facilitating  them  with  
resources  such  as  electricity  and  water  

II) Single  Window  Clearance  –  Speedier  Land  Allotment  Process  

• Post  consent  of  landowners,  the  acquisition  process  must  be  completed  under  defined  timelines  
(~1  week  or  so)  

• Post  land  acquisitions,  single  window  clearance  should  be  enabled  to  provide  a  one  stop  shop  
for  furnishing  all  the  clearances  /  certificates  facilitating  the  allotment  process.  

III) Quick  Wins  –  Resolving  Land  Issues  for  MSMEs  

Due   to   cumbersome   regulations   and   land   unavailability,   MSMEs   resort   to   unauthorized   areas.  
Government  can  support  them  by  facilitating  building  flatted  factories  in  the  urban  estates.  

 Post   directives   from   the   center,   state   should   take   up   infrastructural   and   administrative  
responsibilities  to  build  such    flatted  factories  along  with  providing  basic  resources  such  as  water  
and  electricity  

 A   dedicated   monitoring   office   to   ensure   effective   execution   and   to   provide   support   for   on-­‐going  
processes  

As  an  example,  China  established  MSME  oriented  industrial  zones.  The  key  features  of  the  initiative  
were-­‐   providing   cheap   &   abundant   land   in   the   form   of   factory   shells/   flatted   factories,   necessary  
resource   supply   such   as   water   &   electricity,   housing   accommodation   for   the   workers   and   a  
dedicated   government   institution   for   managing   the   same.   The   critical   factors   that   made   this  
initiative  a  nationwide  success  were-­‐  dedicated  policy  for  supporting  such  zones  &  special  incentives  
for  local  government  for  executing  the  same.  

   

 
   14  

Next  Steps:  

The   objective   of   the   document   is   to   escalate   the   above   said   potential   solution   theme   amongst   the  
stakeholders  and  obtain  their  feedback.    

Potential  stakeholder  map  to  be  leveraged  during  this  exercise  (Exhibit  3  below):  

• Stakeholders  at  Center  –  NISG/NIC/DIT,  Ministry  of  Corporate  Affairs,  Ministry  of  Commerce  &  
Industry,   Ministry   of   Finance,   Ministry   of   Urban   Development,   Ministry   of   Law,   Ministry   of  
Labor,  Ministry  of  Environment  &  Forests,  Ministry  of  MSME,  DIPP  and  CLE  

• Stakeholders   at   State   –   Chief   Ministers,   Industry   Secretaries,   SIDCs,   Department   of   Town   &  
Country  Planning,  State  Departments  (e.g.  Public  Health,  Fire,  Electricity  Board),  NAC  and  State  
Planning  Boards  

• Stakeholders  at  Industrial  Associations  –  FISME  

Exhibit 3: Stakeholder Engagement Map for Space and SWC

Implementation Process – Space and SWC

FOR DISCUSSION

Along with DIPP, Socialize policy Socialize policy with

NMCC / Draft
socialize policy with with CMs and NISG and NIC to
Planning policy Facilitate Facilitate
center & facilitate State industry implement e-SWC
Commission paper
discussions heads across states

Mo CI Discuss and Mo EF Space for MSMEs

Mo CI
provide feedback in NMIZ roadmaps
Centre Mo CA Mo Law
on policy. Reach Circulate policy NISG
consensus Mo UD NIC Appoint technology
Mo UD Mo Lab to State DoTCPs
Mo F SWC vendors to implement
Do TCP SPV and operate e-SWC
Circulate policy Space planning for
to SIDCs MSMEs in Urban Areas SIDC Initiative to construct flatted
CM
CM Introduce SWC bill CM factories with NMIZ like benefits in
Discuss policy To revamp SIDCs &
& other policy Urban areas; encourage private
and provide initiate land surveys SIDC
State suggestions on LA Do TCP sector participation
CM’s approval Eliminate redundant
Ind. Secy.
in Assembly
CM processes in state SWCs
Issue directive to SWC
SPV Conduct extensive Appoint agency to
state ministries to
training & alignment monitor performance of
form a SWC SPV1)
sessions SWC SWC
SPV
Monitor
Agency Monitor SWC Implement and
Private Circulate & provide a
performance, report Operate e-SWC
Players consolidated feedback Tech
to CM and SPV Agency in states
1) SWC SPV will be a CM empowered body with representation from various clearance departments and with legal authority to enforce timelines and model practices across all departments
Source: Booz & Company analysis

Booz & Company Prepared for Planning Commission

   

 
   15  

3.  STREAMLINING  BUSINESS  REGULATORY  FRAMEWORK  VIA  SINGLE  WINDOW  

CLEARANCE  
 

Context  

A   regulatory   environment   is   essential   to   ensure   just   and   sustained   business   development.   As   a   first   step  
to  engineer  a  robust  regulation,  its  objective  should  be  well  defined  along  with  timelines  to  deploy  an  
agenda  driven  approach.  To  simulate  and  institutionalize  the  same,  requisite  policies  should  be  laid  out  
with   the   establishment   of   empowered   institutions,   having   clarity   and   objectivity   in   their   approach.  
Policies   so   formulated   should   furnish   unambiguous   rules   to   ensure   seamless   execution   of   the   entire  
process.  Once  government  formalizes  a  regulation,  a)  step-­‐by-­‐step  procedures,  requiring  adherence  and  
b)   practices,   requiring   compliance,   should   be   detailed   out.   A   good   Business   Regulatory   Framework  
(BRF),   so   deployed,   should   be   collectively   relevant,   mutually   consistent   and   independently   efficient   to  
realize  the  set  goals  so  envisioned.  

In  India,  business  regulations  are  negatively  perceived  due  to  the  cumbersome  processes  and  longtime  
taking  procedures.  In  the  same  light,  concept  of  single  window  is  considered  as  a  potential  solution  to  
provide  a  single  stop  shop  to  furnish  all  the  relevant  certificates  /  clearances.  Single  Window  Clearance  
(SWC),  as  the  name  signifies,  furnishes  all  necessary  “paper  work”  required  at  the  time  of  setting  up  an  
establishment  through  a  “single  window”.  The  idea  behind  SWC  is  to  enhance  efficiency  of  government  
agencies,   minimize   red   tape   and   provide   speedy   treatment   to   the   industries.   Many   states   such   as  
Rajasthan,   Andhra   Pradesh   and   Tamil   Nadu   have   supported   and   institutionalized   SWC   by   a   strong   policy  
framework;  however,  implementation  has  been  challenging  and  the  existing  SWCs  are  regarded  as  the  
additional  window  that  gives  information  of  other  underlying  windows.  

Key  Challenges  faced  by  SWC  

SWC  confronts  with  following  key  challenges  when  reviewed  under  the  ambit  of  a  good  BRF:  

• Institutions  that  executes  Single  Window  Clearance  mechanism  are  not  adequately  empowered,  
hence  inconsistent  with  the  overall  objective  of  ensuring  a  one  stop  shop  

• Even   with   Single   Windows   Act   in-­‐place,   industries   has   to   visit   the   underlying   windows,   hence  
lack  of  consistency  between  rules  and  actual  procedures  and  moreover,  driving  inefficiency  due  
to  additional  step  in-­‐place  

Proposed  Roadmap  

Globally,   many   countries   such   as   Singapore,   Hong   Kong,   Mexico,   Finland   and   Germany   have   adopted  
single   window   facilities   to   streamline   the   complex   processes   to   drive   efficiency.   Singapore’s   single  
window  trade  interface  is  considered  as  a  best-­‐in-­‐class  example  where  Government’s  concerted  effort  
helped   in   executing   the   concept   in   true   spirits.   The   key   enablers   were-­‐   commitment   at   the   high   level  
(Minister   of   Trade   &   Industry),   multi-­‐agency   steering   committee   &   sub-­‐committees   for   its   tight  
 

 
   16  

implementation,   competitive   selection   of   the   technical   services   provider   and   phased   implementation  
approach  to  ensure  successful  nationwide  coverage.  

In   India   too,   many   states   such   as   Andhra   Pradesh   (AP)   and   Rajasthan   have   passed   SWC   Acts   to  
institutionalize   the   concept   but   failed   to   implement   it   seamlessly,   leaving   significant   room   for  
improvement.   Going   forward,   Government   must   act   to   drive   successful   implementation   of   SWC  
mechanism  to  gain  traction  with  investors  and  provide  an  apt  platform  for  entrepreneurs  to  grow  and  
drive  domestic  capabilities.  Firstly,  it  is  imperative  to  reinforce  the  implementation  of  SWC  where  it  is  
currently   under   practice   and   secondly,   to   introduce   and   implement   it   effectively   in   rest   of   the   states.  
The  key  to  set  a  functional  SWC  mechanism  is  to  drive  transparency  in  the  governance  and  commitment  
from  high  level  empowered  body  to  lead  and  implement  the  effort  end-­‐to-­‐end.  Few  enablers  that  were  
exercised  by  the  state  government  of  Rajasthan  and  AP  while  implementing  the  single  window  concept  
were:  

• State  government  enacted  the  laws  to  enforce  SWC  framework  

• Defined  timelines  enabled  by  strong  inter-­‐department  coordination  and  departmental  penalties    

• Extensive  training  to  build  capabilities  in  the  people,  multiple  alignment  sessions  for  early  buy-­‐in  
and  enhancing  usability  of  the  new  processes  

For  the  successful  implementation,  each  state  CM  should  commit  to,  a)  cut  the  number  of  regulations,  
b)  SWC  and  c)  facilitate  SWC  body  (SWC  SPV)  directly  under  his  office  (CMO).  

Following  five  pillars  could  guide  for  building  a  robust  solution  theme:  

• Commitment  at  the  Highest  Level  

o Cutting  the  Number  of  Regulations  –  Center  (Ministries)/State  (CMs)  should  commit  to  
cut  the  number  of  regulations,  e.g.  South  Korea  conducted  a  comprehensive  regulatory  
reforms  in  8  ministries  &  eliminated  33.17%  of  regulations  

o Institutionalizing   SWC   –   Facilitate   SWC   body   such   as   SWC   SPV,   directly   under   an  
empowered  body  (Ministry/CMO)  to  manage  and  drive  the  entire  implementation;  also,  
to  build  a  tiered  single  windows  to  cater  to  industries  of  all  sizes    

• Stakeholder   Coordination,   sessions   from   CMO   and   a   dedicated   department   managing   and  
tracking  the  success  

o To  organize  extensive  training  and  stakeholder  sessions  to  obtain  early  buy-­‐in  

o To  involve  industry  bodies  while  formulating  the  framework  

• Legal  framework  for  enforcing  SWC  

o To  address  critical  issues  such  as  data  protection,  archiving,  access  authority,  etc.  
 

 
   17  

o To  pass  a  legislation  to  institutionalize  the  concept  –  Single  Window  Act  

• Implementation  model  with  detailed  phased  approach  

o To   ensure   time   bound   actions   /   approvals   and   well-­‐defined   accountabilities   with   a  

penalty  linked  system  

o To  reduce  number  of  application  forms  by  a  Common  Application  Form  (CAF)  where  the  
over-­‐lapping  information  is  combined,  facilitating  SWC  mechanism  

o  To   constitute   a   single   window   committee,   headed   by   the   empowered   institution,  

comprising  of  representatives  from  different  departments,  accountable  for  any  delay  /  
actions  by  respective  department  

o To  organize  weekly  /  fort  night  SW  committee  to  process  the  applications  and  to  track  
the  progress  along  with  a  monthly  steering  committee  with  the  senior  board    

• Technology   Deployment   to   enable   SWC   implementation   and   effectively   handle   the   data,  
application  processing,  etc.  

o To  assign  a  technical  vendor  competitively  for  building  the  entire  system  

o To  build  sufficient  IT  infrastructure,  both  material  and  people  

Implementing   this   key   regulator   will   have   a   potential   widespread   impact   on   the   entire   Business  
Regulator   Framework   (BRF).   With   this   one   stop   shop   concept   in-­‐place   –   land   acquisition,   labor   &  
environmental   regulations   and   other   permits   /   certificates   will   be   simpler   to   furnish.   Hence,   will   drive  
efficiency  and  create  a  positive  environment  amongst  investors.  

   

 
   18  

Next  Steps:  

The   objective   of   the   document   is   to   escalate   the   above   said   potential   solution   theme   amongst   the  
stakeholders  and  obtain  their  feedback.  

Potential  stakeholder  map  to  be  leveraged  during  this  exercise  (Exhibit  4  below):  

• Stakeholders  at  Center  –  NISG/NIC/DIT,  Ministry  of  Corporate  Affairs,  Ministry  of  Commerce  &  
Industry,   Ministry   of   Finance,   Ministry   of   Urban   Development,   Ministry   of   Law,   Ministry   of  
Labor,  Ministry  of  Environment  &  Forests,  Ministry  of  MSME,  DIPP  and  CLE  

• Stakeholders   at   State   –   Chief   Ministers,   Industry   Secretaries,   SIDCs,   Department   of   Town   &  
Country  Planning,  State  Departments  (e.g.  Public  Health,  Fire,  Electricity  Board),  NAC  and  State  
Planning  Boards  

• Stakeholders  at  Industrial  Associations  –  FISME  

Stakeholder  engagement  for  SWC  should  happen  in  tandem  with  Land.  

Exhibit 4: Stakeholder Engagement Map for Space and SWC

Implementation Process – Space and SWC

FOR DISCUSSION

Along with DIPP, Socialize policy Socialize policy with

NMCC / Draft
socialize policy with with CMs and NISG and NIC to
Planning policy Facilitate Facilitate
center & facilitate State industry implement e-SWC
Commission paper
discussions heads across states

Mo CI Discuss and Mo EF Space for MSMEs

Mo CI
provide feedback in NMIZ roadmaps
Centre Mo CA Mo Law
on policy. Reach Circulate policy NISG
consensus Mo UD NIC Appoint technology
Mo UD Mo Lab to State DoTCPs
Mo F SWC vendors to implement
Do TCP SPV and operate e-SWC
Circulate policy Space planning for
to SIDCs MSMEs in Urban Areas SIDC Initiative to construct flatted
CM
CM Introduce SWC bill CM factories with NMIZ like benefits in
Discuss policy To revamp SIDCs &
& other policy Urban areas; encourage private
and provide initiate land surveys SIDC
State suggestions on LA Do TCP sector participation
CM’s approval Eliminate redundant
Ind. Secy.
in Assembly
CM processes in state SWCs
Issue directive to SWC
SPV Conduct extensive Appoint agency to
state ministries to
training & alignment monitor performance of
form a SWC SPV1)
sessions SWC SWC
SPV
Monitor
Agency Monitor SWC Implement and
Private Circulate & provide a
performance, report Operate e-SWC
Players consolidated feedback Tech
to CM and SPV Agency in states
1) SWC SPV will be a CM empowered body with representation from various clearance departments and with legal authority to enforce timelines and model practices across all departments
Source: Booz & Company analysis
 
Booz & Company Prepared for Planning Commission

   

 
   19  

4.  STREAMLINING  ENVIRONMENT  REGULATIONS    

 

Context  

BRF   spans   multiple   aspects   covering   various   processes   at   entry,   operations   and   exit   step   of   the  
businesses.   Environmental   regulations   impacts   both   entry   and   operations   and   are   considered   critical   for  
achieving  sustainable  development.  It  is  the  joint  coordination  between  industry  and  government  that  
ensures   seamless   functioning   of   the   entire   machinery.   Despite   having   plethora   of   legislations   and  
regulations,   enforcement   remains   a   key   concern.   Hence,   it   is   essential   to   build   a   balanced   approach  
while  designing  a  regulation  to  ensure  least  disruptive  effects  and  unconstrained  growth  of  the  targeted  
industry.  

 Critical  Challenges  Inflicted  by  Environment  Regulations  

While   environmental   regulations   were   envisioned   to   build   a   healthier   environment   and   a   growing  
economy,   industry   had   faced   multiple   obstacles   owing   to   an   ineffective   framework   in   place.   The  
problem   is   twofold   –   a)   nontransparent   approval   mechanism,   and   b)   nontransparent   and   ineffective  
monitoring  mechanism.  Overall,  the  entire  regulatory  structure  imposes  following  challenges:  

• Complicated  and  subjective-­‐in-­‐nature  regulations  opened  for  multiple  interpretations  

• Ineffective   and   negatively   perceived   Inspection   and   Monitoring   processes   (I&M)   due   to   high  
interference,  potential  disruption  in  business  lines  and  overall  unfriendly  experience  

• Complicated   and   ambiguous   procedure   while   obtaining   an   EC   (environment   clearance)  

certificate  at  the  time  of  establishment  

• Lack  of  education  and  clarity  while  communicating  the  regulatory  steps  that  are  to  be  followed  
while  furnishing  clearance  

• Ineffective  organization  role,  not  well-­‐defined  roles  &  responsibilities  in  SPCBs/PCCs  

Proposed  Roadmap  

On  a  positive  note,  Government  is  aware  of  the  limitations  posed  by  the  current  regulations.  Some  of  
the  inefficiencies  present  in  the  administrative  processes  were  targeted  in  the  11th  five  year  plan.  NMP  
2010  also  discussed  multiple  recommendations  to  simplify  the  clearance  processes;  however,  only  few  
were   adopted   under   National   Manufacturing   Policy,   applicable   to   new   manufacturing   units   in   NMIZs.  
Currently,  a  working  group  on  Environment  and  Forest  under  Planning  Commission  has  also  highlighted  
the  critical  challenges  afresh  and  suggested  few  potential  steps  going  forward.  

Some   relevant   recommendations   from   National   Manufacturing   Policy   for   units   in   NMIZs   were   third  
party   agencies   for   conducting   I&M   processes,   web   enabled   clearances,   priority   basis   clearances   with  
defined  timelines  and  25%  grant  or  maximum  of  1  lac  for  SMEs  for  environmental  and  water  audits.  
 

 
   20  

Below  are  few  recommendations  from  the  sub-­‐group  report  on  “Environment”  for  12th  Five  Year  Plan:  

• To   exercise   key   levers   such   as   upward   revision   in   the   penalties   and   a   provision   of   bank  
guarantee  towards  any  environmental  violations  

• To  build  up  sufficient  infrastructure  and  IT-­‐based  clearance  system  to  drive  efficiency  

• To  up-­‐grade  existing  laboratories  to  improve  their  technical  competency  

• SPCBs/PCCs   to   be   supplemented   by   third   party   auditors   for   timeliness   procedure   and  

eradicating  unnecessary  delays  

• To   develop   template   for   audits   –   simpler   one   for   MSMEs   and   more   exhaustive   one   for   larger  
units;  auditing  could  be  outsourced  to  empanelled  consultants  

• To  create  awareness  about  environmental  regulations  amongst  key  stakeholders  

Going  forward,  there  is  a  need  to  collate  and  drive  targeted  recommendations  with  a  robust  metric  to  
assess   the   effectiveness.   Also,   there   is   a   need   to   list   out   the   specific   Acts   which   could   be   amended   to  
institutionalize  the  change.    

Detailed  recommendations  related  to  one-­‐time  processes:  

Success  Metric:  Longest  Time  taken  to  get  NOC  &  EIA  

Guiding  Principle:  To  ensure  independent  regulator  with  transparent  procedures  

o Each   SPCB,   in   consultation   with   NEAMA   (explained   below),   to   make   available  

standardized   procedures   online.   Online   process   should   be   held   as   the   authorized  
process.    (Section  17  &  Section  3,  EPA,  1986)  

o Online   clearance   system   via   Single   Window   Clearance   Mechanism   (Single   Window  
Clearance  Act  /  Section  3,  EPA,  1986)  

o Defined   timelines   for   issuing   the   clearance.   If   violated,   should   be   taken   to   the   higher  
level  with  a  well-­‐defined  SOP  (Section  5,  EPA,  1986)    

o  To  detail  out  “Category  B  1”  and  “B  2”  for  unambiguous  categorization  while  issuing  EIA  
certificates  (EIA  Notification,  2006  under  Section  5,  EPA,  1986)  

o To   exempt   non-­‐polluting   establishments   (of   all   sizes)   from   ECs   and   introduce   flexible  
certification  processes  for  small  businesses  (Section  5,  EPA,  1986)  

o To  exempt  Prospecting  License  from  ECs  (Section  5  &  25,  EPA,  1986)  

Detailed  recommendations  related  to  on-­‐going  processes:  

 
   21  

Success  Metric:  Ambient  Air  Quality  and  River  Water  Quality  

Guiding  Principle:  Harnessing  civil  society  –  to  enable  third  party  audits,  right  of  appeal  and  to  
strengthen  both  government  and  private  sector  to  build  monitoring  and  certification  capabilities  

o Creation   of   independent   National   Environmental   Appraisal   and   Monitoring   Agency  

(NEAMA)  as  a  recommendatory  body  to  CPCB/SPCBs/MoEF  (Section  5  &  25,  EPA,  1986)  

o NEAMA  should  work  with  all  SPCBs  to  develop  consistent  rules  and  procedures  (Section  
3,  EPA,  1986)  

o To  include  self-­‐monitoring  and  representing  verification  (MRV)  and  an  associated  third  
party  audit  (Section  5  &  25,  EPA,  1986)  

o NEAMA   to   act   as   ombudsman   in   case   of   conflict   between   authorized   third   party   and  
SPCB  audits  (Section  5,  EPA,  1986)  

o To  develop  template  for  annual  audits  (differentiated  for  MSMEs  and  large  enterprises)  
with  an  outsourced  auditing  functioning  (Section  5  &  25,  EPA,  1986)  

o To   upgrade   and   revise   monetary   penalties   to   drive   effective   enforcement   per   listed  
standards1)  (Section  16,  EPA,  1986)  

o To   deploy   a   process,   if   possible,   to   measure   pollution   rejected   from   a   manufacturing  

unit  rather  than  checking  the  entire  process  step  by  step  (Section  12,  EPA,  1986)  

Other  recommendations:  

Success  Metric:  Regular  Surveys  and  Industry  Polls  

o Strengthening   existing   technical   capabilities   of   CPCBs/SPCBs   –infrastructure   and  

manpower  (Section  3,  EPA,  1986)  

o To  create  awareness  and  remove  ambiguity  towards  environment  regulatory  framework  

amongst  key  stakeholders  (Section  10,  EPA,  1986)  

o To   provide   opportunity   to   small   entities   to   participate   in   the   development   of   certain  

regulations  directly  impacting  their  operations  and  growth  (Section  3,  EPA,  1986)  

The  above  recommendations  focus  on  driving  institutional  and  processes  reforms.  

   

 
   22  

Next  Steps:  

The   objective   of   the   document   is   to   escalate   the   above   said   potential   solution   theme   amongst   the  
stakeholders  and  obtain  their  feedback.  

Potential  stakeholder  map  to  be  leveraged  during  this  exercise  (Exhibit  5  below):  

• Stakeholders   at   Center   –   Ministry   of   Corporate   Affairs,   Ministry   of   Commerce   &   Industry,  

Ministry  of  Environment  and  Forests,  Central  Pollution  Control  Board,  Ministry  of  Law,  Ministry  
of  MSME  and  Ministry  of  Labor  

• Stakeholders  at  State  –  Chief  Ministers,  State  Pollution  Control  Board,  Policing  Agency,  NEAMA  

 1) Other  recommendations  such  as  fast-­‐tracking  l evy  of  penalty,  provisions  for  bank  guarantee,  etc.  could  put  financial  stress  to  financially  weak  
set-­‐ups.  To  drive  effectiveness,  this  type  of  action  should  be  linked  to  the  size  of  an  establishment  
 

Exhibit 5: Stakeholder Engagement Map for Environment

Implementation Process – Environment

FOR DISCUSSION

Along with DIPP,

NMCC / Draft Socialize policy
socialize policy with
Planning policy with CMs and Facilitate
center & facilitate
Commission paper State PCBs
discussions

Mo CI Discuss and Mo EF Mo EF Mo EF Mo EF
provide feedback Finalize NEAMA Design and execute To strengthen
Centre Mo CA Mo Law
on policy. Reach establishment NEAMA framework capabilities of CPCBs
Mo EF
consensus
CPCB Appoint an independent 3rd party
CM
agency to monitor and report Air /
SPCB Water pollution metrics
Introduce SWC1) bill & Create extensive
CM other policy driven awareness for new
Discuss policy
recommendations in procedures and other
and provide
State Assembly regulations
CM’s approval CM NEAMA Start tracking
CM
SPCB
NEAMA to develop time metric for
To strengthen existing
consistent rules and NOC
capabilities of SPCBs
procedures with SPCB
– infra & manpower
SPCB SPCBs
Monitor
Private Circulate & provide Agency Monitor metrics in
Players a consolidated industrial areas and
feedback report to CM, SPCBs

1) Follow the similar procedure for setting up an SWC as laid out in Space / Land and SWC Implementation plan
Source: Booz & Company analysis
 
Booz & Company Prepared for Planning Commission

   

 
   23  

5.  STREAMLINING  LABOR  REGULATIONS    

 

Context  

BRF   spans   multiple   aspects   covering   various   processes   at   entry,   operations   and   exit   step   of   the  
businesses.  Labor  regulations  affect  the  operations  and  are  critical  as  they  encompass  a  huge  labor  force  
constituting   a   significant   chunk   of   the   population,   near   about   460   million   individuals   employed   in  
various  sectors  and  industries.  However,  the  entire  labor  regulatory  system  is  perceived  as  a  hindrance  
to   the   growth   in   formal   employment   as   well   as   social   welfare,   owing   to   its   complicated   structure   and  
multiple   formal   procedures   to   be   followed   for   compliance.   Our   labour   framework   has   resulted   in  
potentially   the   “worst   of   both   worlds”   with   us   having   neither   widespread   employment   nor   adequate  
labour   welfare.   Importance   of   amending   this   situation   should   be   the   foremost   priority   if   India   is   to   reap  
the  demographic  dividend  and  not  turn  it  into  a  demographic  disaster  

Key  Challenges  

Under  the  ambit  of  a  good  BRF,  labor  regulations  inflict  two  critical  challenges  on  the  industry  pertaining  
to  its  rules  and  procedures:  

• Problems  inflicted  by  the  rules  so  formulated  with  an  objective  to  ensure  compliance  are:  
o Various   disparities   in   labor   regulations   such   as   differences   in   the   basic   definitions   of  
wages,  workmen,  etc.  hence  being  inconsistent  
o Labour   laws   impose   restrictions   on   hiring   /   firing,   working   and   overtime   hours   of  
workers;   hence,   laws   are   indirectly   counterproductive   and     the   numeric   thresholds  
limits  their  universal  applicability  
• Procedural   requirements,   multiple   &   highly   frequent   paper   filings   as   well   as   unpredictable   &  
large   number   of   inspections   further   worsens   the   situation   and   make   the   entire   machinery  
inefficient  

Hence,  encouragement  of  business-­‐  to  ensure  employment  generation,  wealth  creation  and  tax  revenue  
increase,   leading   to   overall   societal   prosperity-­‐   requires   a   facilitative   business   regulatory   framework  
(BRF)   and   concrete   steps   towards   designing   and   implementing   solutions   to   the   problems   discussed  
above.     A   good   BRF   requires   for   laws   to   be   limited   in   number,   consistent   and   comprehensive.   In   the  
same   light,   the   next   section   discusses   the   overall   solution   theme   to   drive   the   change   followed   by   the  
specific  recommendations.      

 
   24  

Proposed  Roadmap  

Going  forward,  there  are  three  clear  imperatives  that  could  bring  a  step  change  in  this  direction:  

• Consistency  and  Comprehensiveness  

As   already   recommended   in   numerous   past   studies,   including   most   recently   the   Ministry’s  
Working   Group   on   Labor   Laws   and   Other   Regulations   for   the   Twelfth   Five   Year   Plan,   the   various  
disparate  labor  regulations  should  be  consolidated  to  ensure  consistency  in  terms  of  definitions  
and  coverage.  There  should  be  one  overarching  legislation,  or  a  limited  number  of  overarching  
legislations,   covering   (a)   payment   of   wages   and   social   security,   (b)   occupational   safety   and  
health/   working   conditions   and   welfare,   and   (c)   representation   and   industrial   relations.   This   will  
not  only  ensure  consistency  but  also  result  in  fewer  regulations,  as  currently  there  are  over  15  
acts   covering   the   above,   with   their   own   disparate   and   at   times   conflicting   definitions   and  
mandates  

• OSHA  Provisions  

Occupational   Safety   and   Health   Administration   is   essential   for   the   manufacturing   sector   and  
should   be   made   watertight   to   ensure   seamless   support   to   the   employees.   Two  
recommendations  could  assist  in  making  the  processes  universal  while  ensuring  no  misuse.  

o Universally  Followed  –  Applicable  independent  to  the  size  of  establishment.  This  drive  
will   cover   all   commercial   establishments   under   regular   monitoring   and   inspection   per  
OSHA  standards  
o Third  Party  Auditors  –  Usually,  labor  inspectors  conduct  detailed  monitoring.  Allowing  
third  party  auditors  could  drive  efficiency  in  the  process.  
 
• Minimizing  Onerous  Documentation  

Labor   regulations   are   perceived   as   complex   due   to   multiple   forms   and   registers   to   be  
maintained  in  compliance  with  the  labor  regulations.  A  Common  Application  Form  (CAF)  should  
be   introduced   to   eliminate   redundant   entries,   hence   reducing   the   time   spent   while   complying  
with  labor  regulations  and  also  facilitating  Single  Window  Clearances.  

Hence,  there  is  a  need  to  drive  consistency  in  basic  definitions  and  their  interpretations  in  the  laws,  to  
ensure   universal   applicability   and   an   effort   to   reduce   the   load   of   documentation,   required   for  
compliance,   from   the   industry.   Set   of   specific   recommendations   could   drive   the   immediate   impact.  
Under   the   same   light,   next   section   demonstrates   the   key   levers   that   could   be   exercised   to   propel   this  
change  

 
   25  

Specific  Recommendations:  

I) Wages  and  Benefit’s  Provisions:  

Section   51   of   the   Factories   Act   1948   specifies   maximum   number   of   permissible   hours   for   factory  
workers   in   a   week   and   Section   54   of   the   Factories   Act   1948   specify   the   similar   metric   for   a   day.  
Section   64   of   the   Factories   Act   1948   specifies   maximum   number   of   working   hours   (including  
overtime)  permissible  under  state  amendments.  

Above   provisions   should   be   amended   along   with   the   feasibility   to   include   other   considerations   to  
drive   better   value   proposition   for   both   employee   and   employer.   In   totality,   we   envisage   universal  
coverage  of  social  benefits  irrespective  of  the  size  and  nature  of  employment.    

i) Non-­‐restrictive   Working   Hours   –   Weekly,   daily   and   quarterly   working   hour   restrictions   could   be  
aligned   with   international   best   practices   e.g.   10   -­‐   12   hours,   subject   to   overall   existing   weekly  
caps    

ii) Single   Account   Linkage   –   Any   employer,   irrespective   of   nature   of   contract,   must   deposit  
contributions  under  all  labour  schemes  (EPF,  ESI,  Wages,  Disability  Allowance,  Health  Insurance  
&  Other  Payments)  under  different  sub-­‐accounts  which  are  linked  to  single  AADHAR  account  

iii) Self-­‐Declaration  –  Employer  and  employee  to  self-­‐declare  the  accounts  that  they  are  paying  into  
or  receiving  benefits  into  respectively  

II) Layoff  Provisions:  

Section  25  M   of  Industrial  Disputes   Act  of  1947  covers  the  provisions  regarding  prohibition   of   lay-­‐
offs   for   factory   workers,   detailed   in   sub-­‐section   1.     Also,   its   sub-­‐section   3   specifies   a   bureaucratic  
process   to   be   followed   for   the   lay-­‐offs,   allowed   as   per   sub-­‐section   1.   Moreover,   Section   25   G   of  
Industrial   Disputes   Act   of   1947   allows   for   legal   action   against   lay-­‐offs   unless   based   on   “last   come  
first  go”  principle  

These   provisions   pose   significant   challenges   for   manufacturing   units,   which   need   relatively   more  
flexibility  around  the  workforce  planning  to  adjust  per  business  requirement.  Going  forward,  lay-­‐off  
provision   needs   to   be   flexible   with   no   quantitative   restrictions,   without   compromising   employee  
welfare  (EWB,  see  below).  The  recommendations  below  should  be  valid  independent  of  the  nature  
of  employment  e.g.  permanent,  temporary,  contract,  etc.  

i) Lay-­‐off   with   Reason1)   –   No   obligation   on   the   employer   and   the   problem   to   be   resolved   in   the  
labour  court,  if  need  be.  

ii) Lay-­‐off  without  Reason  –  Employer  to  provide  standardized  benefits  to  the  employee  linked  to  
the  tenure  in  the  firm    
1. Legal  reasons  should  be  exhaustively  defined  to  prevent  any  foul  play  
 

 
   26  

III) Unionization  Provisions:  

Trade  Unions  Act  of  1926  provides  a  comprehensive  framework  for  unionization  in  India.  However,  
to   strengthen   the   manufacturing   sector   further,   without   jeopardizing   the   objective   of   Trade   Unions,  
few   amendments   and   new   considerations   could   enable   further   traction   between   the   employee-­‐
employer  relationship  driving  healthy  interactions.  

i) Employee   Welfare   Board   –   Every   employer   should   have   a   labour   welfare   board   on   which  
representatives  of  management  and  that  of  labour  are  present  

ii) Work   Stoppage   Provisions   –   No   work   stoppage   unless   70%   of   employees   vote   using   secret  
ballot  

iii) Wage  Disputes  –  Wage  disputes  will  be  effective  from  demand  date  

Next  Steps:  

The   objective   of   the   document   is   to   escalate   the   above   said   potential   recommendations   amongst   the  
stakeholders  and  obtain  their  feedback.  

Following  is  the  potential  stakeholder  map  which  will  be  leveraged  during  this  exercise:  

• Stakeholders   at   Center   –   Ministry   of   Corporate   Affairs,   Ministry   of   Commerce   &   Industry,  

Ministry   of   Law,   Ministry   of   Labor,   Ministry   of   MSME   and   Employee’s   State   Insurance  
Corporation  

• Stakeholders  at  State  –  Chief  Ministers,  State  Labor  Ministry,  Labor  Secretaries,  Department  for  
Employment  and  Training  

• Stakeholders  at  Industrial  Associations  –  Trade  Unions  and  Employers  Association  

Exhibit 6: Stakeholder Engagement Map for Labour

Implementation Process – Labor

FOR DISCUSSION

Along with PMO, Socialize policy

NMCC / Draft
DIPP, socialize with CMs and
Planning policy Facilitate
policy with center & State Labour
Commission paper
facilitate discussions Secretaries

Set-up a Mo Lab Mo Law Mo Lab

Mo CI Discuss and Mo Lab Mo Lab
Discuss bill(s) with Introduce one CAF
provide feedback committee to
Centre Relevant Ministries to reduce on-going
on policy. Reach amend1) labor
and have it passed documentations
Mo CA consensus Mo MSME Mo Law laws Mo CA Mo CI Mo CA

CM Issue directive to State Min.

Discuss policy Incorporate the provisions
state ministries to
and provide under revised law and make
adopt new policy &
State CM’s approval changes in procedures
Labor Secy. documents
CM
Introduce SWC2)
bill in Assembly

Private Circulate & provide

Players a consolidated
feedback

 
1) Amendments – consistent definitions, single account linkage, lay-off provisions, establishment of employee welfare board, sensitization towards profession, etc., 2) Proceed as explained in “Land & SWC”
Source: Booz & Company analysis

 
Booz & Company Prepared for Planning Commission

 
   27  

6.  STREAMLINING  CONTRACT  ENFORCEMENT  

Context  

BRF   spans   multiple   aspects   covering   various   processes   at   entry,   operations   and   exit   step   of   the  
businesses.   Contract   enforcement   is   critical   to   ensure   smooth   business   operations.   However,   if   a  
fraudulent   transaction   or   other   misrepresentation   is   intended   under   a   contract,   then   the   contract   in  
totality  stands  “void  ab  initio”,  which  makes  it  an  invalid  document  for  any  legal  recourse.  Enforcing  any  
contract,   be   it   supplier   oriented,   consumer   oriented,   employee   oriented   or   government   oriented,   an  
effective  and  dedicated  judicial  system  is  a  pre-­‐requisite.  

 Key  Challenges  

As   per   the   recent   Ease   of   Doing   Business   Report,   2011,   India   is   ranked   183   of   184   countries   in   the  
contract   enforcement   category   owing   to   a)   large   number   of   days   taken   by   the   judiciary   in   resolving   a  
dispute,  estimated  to  be  1,420  days  (least  being  150  days  in  Singapore  -­‐  ranked  1  as  the  easiest  place  for  
doing   a   business),   b)   high   cost   incurred   via   attorney,   court   and   enforcement   costs   building   to   about  
39.6%   (25.8%   in   Singapore)   of   the   total   claim,   and   c)   high   number   of   procedural   steps,   46   (21   in  
Singapore).  

Existing   contract   enforcement   framework   lacks   relevance   at   the   institutional   level   and   struggles   with  
inefficiency  in  the  procedures  so  adopted:  

• Majority   of   the   commercial   dispute   plaintiffs   resort   to   litigation   and   do   not   consider   alternate  
dispute  resolving  systems  such  as  mediation  /  arbitration  

• Inefficient   system   as   it   takes   long   time   to   solve   a   dispute   due   to   insufficient   infrastructure,   in  
terms  of  number  of  courts,  judges  and  advocates  

It  is  critical  to  design  a  robust  dispute  resolving  procedures  /  bodies  based  on  two  fundamentals:  

• Relevant  institutions  to  address  the  specific  needs  (mediation/arbitration/specialized  courts)  

• Efficient  body  to  ensure  speedy  disposition  of  cases  

Potential  Solution  Themes  

Government   has   been   trying   to   introduce   relevant   changes,   evident   from   the   publishing   of   188th   Report  
on   Proposals   for   Constitution   of   Hi-­‐tech   Fast-­‐track   Commercial   Division   in   High   Courts   in   December,  
2003,  that  introduced  the  concept  of  specialized  courts.  Also,  the  Indian  Contract  Act  of  1872  provides  a  
comprehensive   legal   structure   with   eleven   chapters   with   266   sections,   addressing   pertinent   contract  
violations.  We  can  focus  on  creating  specialized  courts,  a  draft  bill  of  which  is  already  in  place:  

• Creation  of  Specialized  Courts:  

 
   28  

Bill  titled  The  Commercial  Division  of  High  Courts  Bill  (Bill  No.  139)  was  passed  by  Lok  Sabha  in  
2009  and  revised  once  by  Rajya  Sabha  in  2010.  The  bill  focuses  on  creating  specialized  courts  in  
the   premises   of   existing   High   Courts   to   address   and   provide   fast-­‐track   treatment   to   all   the  
commercial   disputes   as   defined   under   Section   2(a)   of   the   bill   of   specified   value1).   The   bill,   so  
drafted,  should  be  encouraged  and  passed  after  reconciling  any  potential  opposition  prior  to  its  
implementation.  

Following  recommendations  could  ensure  effective  implementation  of  the  proposed  courts:  

• Mandating   Alternate   Dispute   Resolution   (ADR)   Systems:   To   mandate   that   a   commercial  

dispute  filed  under  the  specialized  courts,  must  be  redirected  to  the  assigned  third  parties  first,  
if   considered   appropriate,     (by   respective   High   Courts)   for   Mediation   /   Arbitration   priori  
repealing  in  the  court  

• Building  Capabilities  &  Capacity  in  ADR:  Arbitration  and  mediation  are  two  critical  modes.  It  is  
essential  to  set-­‐up  multiple  and  good  arbitration  units  which  could  inspire  confidence.  Hence,  a  
need   to   establish   institutions   across   India   to   build   expert   arbitrators   to   handle   such   disputes.  
Also,   more   mediation   units   should   be   built   and   made   available   to   the   masses.   Recommended  
mediation   and   arbitration   capabilities   are   established   parallel   to   entry   levels   of   judiciary   (city  
court)   nationwide   in   a   phased   manner.   Further,   this   should   not   be   restricted   to   only   retired  
judges  but  should  be  open  to  anyone  with  a  basic  law  degree  and  specialized  certificate  which  
should  be  made  available  online  by  Indian  Council  of  Arbitration.  

Government  can  also  explore  other  potential  solutions,  which  are  successfully  implemented  elsewhere.  

• Channelizing  Small  Claim  Units  (e.g.  Zimbabwe,  Zambia)  :  To  set  a  flexible  limit  on  the  threshold  of  
claims   filed   under   specified   commercial   divisions   (suggested   above   as   a   part   of   Commercial  
Division  of  High  Courts),  subject  to  annual  revision,  for  driving  efficiency  and  speediness  

• Utilizing  Active  Case  Management  (Ghana,  Japan,  Malaysia,  Sri  Lanka)  :  To  establish  an  online  case  
management  system  for  better  and  quick  access  to  the  relevant  case  /  data    

• e-­‐Complaint  Filing   (Australia,  Czech  Republic,  UAE,  US)   :  To  introduce  online  case  filing  mechanism  
to  speed  up  the  pre-­‐hearing  processes  (currently  20  days  compared  to  6  days  in  Singapore)  

• Measuring   Court’s   or   Individual   Performances   (Australia,   Singapore,   US,   Netherlands)   :   To   assess  

performances  so  as  to  institutionalize  performance  driven  culture  

The  
1) above   recommendations  
To  create   focus  
a  two  tier  commercial   on  driving  
divisions:  <1  Cr.  iCnstitutional   and  parocesses  
ommercial  disputes   nd  >1  Cr.  drisputes  
eforms.  

   

 
   29  

Next  Steps:  

The   objective   of   the   document   is   to   escalate   the   above   said   potential   recommendations   amongst   the  
stakeholders  and  obtain  their  feedback.  

Following  is  the  potential  stakeholder  map  which  will  be  leveraged  during  this  exercise:  

• Stakeholders   at   Center   –   Ministry   of   Corporate   Affairs,   Ministry   of   Commerce   &   Industry,  

Ministry  of  Law  and  Law  Commission  of  India  

• Stakeholders  at  State  –  State  Law  Ministries  

 
Exhibit   7:  Stakeholder  Engagement  
Implementation Process –MEnforcing
ap  for  Contract   Enforcement  
Contracts
 
FOR DISCUSSION

Along with DIPP, Socialize policy

NMCC / Draft
socialize policy with with CMs and
Planning policy Facilitate
center & facilitate State Labour
Commission paper
discussions Secretaries

Mo CI Discuss and Mo Law Mo CI Build capabilities in ADRs by Mo Law Finalize Mo CI

provide feedback setting up arbitration establishment of
Centre
on policy. Reach institutions/colleges and more specialized courts
Mo CA consensus LCI Mo CA mediation units in practice LCI & mandate ADRs Mo CA

State Law
Min. Issue directive to state Building IT base to Gather data on pending
Discuss policy
ministries to adopt new enable active case commercial disputes/court’s
and provide
judicial system & management and e- performance to measure the
State CM’s approval
support ADRs State Law complaint filing State Law success
Min. Min.

Private Circulate & provide

Players a consolidated
feedback

Source: Booz & Company analysis

     
Booz & Company Prepared for Planning Commission

 
   30  

7.  EXIT  FRAMEWORK  IN  INDIA  

 

Exit  framework  is  expected  to  be  robust  going  forward  given  comprehensive  laws  in-­‐place  and  
upcoming  dedicated  tribunal  –  NCLT  

It  has  traditionally  taken  nearly  seven  years  for  wind-­‐up  proceedings  in  the  Indian  courts  (as  evidenced  
by  the  Law  Ministry’s  own  admission).  However,  the  recent  clearance  granted  by  the  Madras  High  Court  
in   December   2011   to   the   establishment   of   the   National   Company   Law   Tribunal   and   the   Appellate  
Tribunals   (NCLT/   NCLAT)   as   well   as   the   wind-­‐up   provisions   contained   in   the   revised   Companies   Act,  
establish  a  strong  institutional  framework  for  speedy  exit.  
 
Exit  policy  seems  to  be  now  comprehensively  laid  out  in  the  legislative  process,  in  terms  of  specific  acts  /  
sections  /  clauses  addressing  both  reconstruction  and  winding  up  (exit)  of  the  registered  companies  (The  
Companies  Act,  1956:  Section  424A-­‐L).  Also,  there  is  a  dedicated  chapter  that  facilitates  the  winding  up  
of  unregistered  companies  as  well  (The  Companies  Act,  1956:  Section  583).  
 
Moreover,   NCLT   and   NCLAT,   a   new   tribunal,   will   be   addressing   these   issues   which   were   earlier   taken   up  
by  CLB.  NCLT  is  expected  to  be  up  and  running  by  the  end  of  this  year  (2012-­‐13).    
 
The   Planning   Commission   may   wish   to   monitor   the   progress   of   the   establishment   and   proper  
functioning   of   the   proposed   NCLT   and   NCLAT   by   the   Ministry   of   Company   Affairs   and   the   Ministry   of  
Law,  and  render  all  help  in  ensuring  the  speedy  establishment  of  the  same  
 
 

   

 
   31  

CONCLUSION  
 
The   above   report   lays   out   the   six   focus   areas,   representing   the   potentially   disproportionate   burden  
which   regulation   imposes   on   manufacturing   in   India,   particularly   from   the   perspective   of   the   Micro,  
Small,   and   Medium   manufacturing   enterprises.   In   addition,   care   has   been   taken   to   incorporate   past  
studies   conducted   by   various   government   and   industry   institutions,   so   as   to   ensure   continuity   and  
consistency.      
 
The  hallmark  of  any  analysis  is  the  degree  to  which  the  recommendations  are  actually  implemented.  In  
furtherance  of  this  desired  outcome,  a  detailed  stakeholder  interaction  plan  has  also  been  developed  for  
each   focus   area,   which   we   hope   will   prove   useful   to   the   coordinating   agency   and   the   various   other  
stakeholders.    Further,  while  some  specific  recommendations  have  been  unavoidably  made,  there  is  a  
conscious   emphasis   on   specific   thematic   principles   which   guide   good   regulation,   and   for   institutional  
strengthening  in  each  focus  area.    
 
We   hope   that   this   will   result   in   an   enhanced   degree   of   ownership   and   an   improvement   of   “systemic”  
capabilities  to  analyze  and  engage  in  ongoing  continuous  improvement,  and  result  in  an  improvement  in  
the  overall  business  regulatory  framework  of  the  country  not  just  in  the  immediate  period  but  also  for  
the  times  to  come.