Environmental clearance major hurdle in Gujarat: UK consultants report

Top UK-based consultants Deloitte Touche Tohmatsu’s Indian professionals’ report, “Survey on Business Regulatory Environment for Manufacturing – State Level Assessment”, prepared for the Planning Commission, may have rated Gujarat as No 2 state – next to Haryana – on important industry-related yardsticks which attract investment (read HERE). However, a study of detailed inter-state comparison of the report suggests that Gujarat ranks 16th among 20 major states in obtaining environmental compliance for establishing enterprises, and 15th in getting environmental compliance to them to kick-start operation.
Gujarat’s entrepreneurs, who have been surveyed, have reportedly told Deloitte that it takes 100 days, on an average, to get consent to establish an enterprise, and 106 days to get consent to operate. This is against 29 days in taken to get consent to establish in Kerala, 55 days in Punjab, 60 days in Maharashtra and Chhattigarh, 70 days in Odisha, 78 days in Karnataka, 74 days in Rajasthan, and 90 days in Tamil Nadu. As for getting consent for kick-starting the enterprise, it takes 29 days in Kerala, 36 days taken in Maharashtra, 55 days in Tamil Nadu, 74 days in Haryana, and 85 days in Haryana.
Not without reason, the consultants say, in obtaining consent to obtain environmental clearance, Gujarat is placed at the “bottom 20 percentile of states”. They further say, “Most respondents were not satisfied with their experience in obtaining (clearances) on account of complex documentation requirements, and delays in conducting inspections.” They point out, “Environmental clearance is (an) area which needs to be improved significantly”. By way of advice, they add, “Standard document checklists for submission as well as standard procedures for inspection may be transparently shared…”

Environmental clearance is not the only grey area noticed by the consultants. The report says, “Compliances, registration of license under Factories Act require around 50 days”, and here again Gujarat is below several states. This is because “the application of approval/ renewal processes under Factories Act (is) not online.” Same is the case with “manual processes for other labour law related compliance”. The states which take less number of days than Gujarat are Haryana (11), Andhra Pradesh (35), Odisha (40), and Tamil Nadu (45).
Gujarat, a power surplus state, tops the list of all states in offering power-related clearances – just about 16 days. This is against 60 days taken in Tamil Nadu, 65 days Maharashtra and Karnataka, 71 days in West Bengal, 75 days in Andhra Pradesh, and so on. However, in water-related approvals, it takes 45 days in Gujarat, as against just four days in Punjab, 15 days in Haryana, 30 days in Andhra Pradesh and Odisha. Similarly, in taking fire-related no-objection certificate, it takes 37 days in Gujarat, as against Kerala’s seven days, eight days in Punjab, 16 days in Tamil Nadu, and 17 days in Andhra Pradesh.

Much has been said about Gujarat providing “quickest” land clearances. However, the survey suggests that on an average it takes 120 days for land allocation through a state agency, 100 days in for conversion of land for industrial use, 49 days in building approvals. This is against 80 days in land allocation in Haryana and 90 days in Andhra Pradesh. As for land conversion, Gujarat does a much quicker job. But as for building approvals, several states take lesser number of days, including West Bengal (28), Andhra Pradesh (30), Punjab (30), Tamil Nadu (40), Rajasthan (43), and so on.