Chandigarh, April 15 – Punjab on Thursday took a major leap towards becoming a national and global lighthouse for ‘Ease of Doing Business for MSME’, with Chief Minister Captain Amarinder Singh unleashing a fresh wave of reforms to further reduce the regulatory burden on MSMEs through rationalisation, digitalisation and decriminalisation of the regulatory landscape, thus enabling entrepreneurs to focus on expanding their operations in an predictable business environment during this COVID-19 pandemic.
The reforms on removing imprisonment terms, building flexibility and reducing oversight in the labour rules, and pursuing a data driven assessment of service delivery delays are all centered around making entrepreneurship easier in Punjab, said the Chief Minister, underlining his government’s commitment to reducing the time, risk, and cost associated with compliance significantly, freeing up entrepreneurs to focus on growth.
Terming it the beginning of the state’s transformation journey, the Chief Minister said with these reforms, commitments had been set for future changes, including rationalising trade license with shops & establishments act and removing imprisonment terms from 100 low risk provisions in non-labour related rules.
Besides, the Chief Minister announced that the number of labour registers will be reduced, requiring an entrepreneur to maintain from 60 to less than 14, and flexibility enhanced in hiring women employees. Discretionary powers of inspectors are being removed with regard to deductions related to absence or leave, which will be deduced from labour registers going forward. These changes will be incorporated in the new State Rules.
Further, to ensure timely delivery of key licenses and permits, as prescribed under the Transparency Act 2018, Government has begun a monthly data driven assessment mechanism under the Chief Secretary to make sure not a single license or permit is delayed beyond the stipulated period.
Going forward, it is also proposed to reduce the number of Pre-commissioning licenses & NOCs to start a business by at least 20%, so the Government, without due cause, never inhibits an entrepreneur to start a new shop or factory, with the possibility of doing this entirely online being explored. In addition, changes will be made in Land Use for starting new business and mechanisms will be developed for timely and hassle-free water, electricity and sewage connections.
“These reforms are the start of a journey, and we hope to make Punjab a lighthouse State for MSME growth support,” he said, adding, “We have listened to entrepreneurs on the ground and we will continue to reduce the compliance burden to start, operate, and grow a business.”
Pointing out that Punjab offers one of the best ecosystems for entrepreneurs to thrive, the Chief Minister said that under his government, Punjab has emerged as a hub for its unique business-friendly ecosystem that promotes entrepreneurship and attracts entrepreneurs from all the corners of the world. The evidence of the same is the receipt of investment of about Rs. 80,000 Cr with proposed employment of 3 Lac individuals, in last 4 years of this Government, he said, adding that the ease of doing business was wooing investors to Punjab not only from different corners of India, but also foreign investors coming first time to India. Recently received investment projects from countries such as France, South Korea, Denmark, UAE, Japan, USA, Singapore, Germany, UK, he added.
The reforms, launched in partnership with GAME (Global Alliance for Mass Entrepreneurship) and Omidyar Network India, prioritise Ease of Doing Business (EoDB) for MSMEs in the state, based on data-informed regulatory changes. The reforms were suggested by the GAME EoDB Task Force’s report titled “Transforming EoDB for MSMEs in Punjab”. The Task Force was set up on the recommendation of the Montek Ahluwalia committee, set up by the state government to revive business in the post-Covid environment.
GAME is an alliance of organizations that aims to catalyze a nation-wide entrepreneurial movement which enables growth and mobility of Existing and new enterprises, 30% of which are women owned, to create 50 mil jobs. Omidyar Network India’s ReSolve Initiative focuses on providing support for lighthouse projects that are creating solutions to empower MSMEs as well as migrant workers.
Chief Secretary Vini Mahajan said on the occasion that the launch today is a promising start in partnership with GAME, Omidyar Network India, Trayas Foundation, Avantis RegTech, and Center for Civil Society to implement substantive changes. Data driven thought leadership, and strong Government commitment were the key to the early success of this partnership, she said, adding that a monthly data-oriented assessment of delays in licenses and permits will be undertaken to ensure that entrepreneurs do not lose valuable time in starting or scaling their business. She lauded the Department of Investment Promotion, Industries & Commerce and Labour for stewarding these reforms admirably.
Sharing his thoughts, Dr. KP Krishnan, IAS (Retd), Former secretary, Government of India who is also the Chairperson of the GAME EoDB Taskforce, said “With the lockdown hitting MSMEs the hardest, the time is ripe for the State to intervene. The recommendations of the taskforce will help do away with outdated regulations that hindered formalization and growth of MSMEs and help them thrive as the engine of the Indian economy”.
Talking about GAME’s work in Punjab, Ravi Venkatesan, Founder, Global Alliance for Mass Entrepreneurship (GAME) said, “Punjab has shown that when there is political will and committed administrative leadership, it is possible for Government, civil society, private sector and small business owners particularly to work together and achieve dramatic progress in a short period of time through simplification, digitization and decriminalization.
Roopa Kudva, the Managing Director Omidyar Network India, an investment firm, focused on the social impact of business.
Notably, Punjab has a strong industrial base of over 2 lakh MSMEs that form the backbone of manufacturing in the State. Thus, Captain Amarinder Government has consistently focused on promoting growth of MSMEs in Punjab. Many of the reforms undertaken by Punjab in recent times such as the Punjab Right to Business Act 2020 are not only geared at enhancing EoDB in general but particularly facilitate a seamless regulatory environment for MSMEs.
The reforms on removing imprisonment terms, building flexibility and reducing oversight in our labour rules, and pursuing a data driven assessment of service delivery delays are all centered around making entrepreneurship easier in Punjab; we believe, these will reduce the time, risk, and cost associated with compliance significantly, freeing up entrepreneurs to focus on growth.