India is emerging as a significant player in the global business circuit. It is amongst the fastest growing economies today and is expected to account for about 10% of the global GDP growth between 2010 and 2020.Investors continue to be drawn towards India with FDI inflows increasing more than 250 times from USD 140 million in 1990 to USD 36 billion today. However, investors continue to struggle with the business environment in the country. The World Bank, in its ‘Doing Business 2014’report ranked India 134out of 185 countries in the overall ease of doing business. This places India lower than Mexico, Russia, China, Brazil, Indonesia, and other South Asian Countries. This, according to the report, is driven by the highly complex regulatory environment in the country, leading to time consuming nature of processes like securing land, building approvals, registering property, obtaining power and water connection, getting credit, paying taxes and enforcing contracts among others.
The State of Karnataka hosts nearly 700 MNCs and a multitude of Fortune 500 Companies, and has been in the forefront of industrial development. It is a rapidly urbanizing State with 38% of its population in urban areas. Urbanization offers the ability for better provision of basic services, and acts as a centre for growth of industry and services. However, both industrialization and urbanization are largely concentrated in and around Bangalore which continues to be the most attractive city 3 for Foreign Direct Investment next only to New Delhi / National Capital Region (NCR). The concentration of the industries in and around Bangalore has stifled the progress of industrialization and the spread of industries across the state.
Investors and entrepreneurs experience hurdles in obtaining timely approvals at different levels. For the investment to materialize the business environment must be conducive and the various Government agencies should serve as facilitators, so that the investors feel at home in the State. The expectations of the investors are high and hence the Government of Karnataka has to gear up to meet the challenges of the competitive environment.
The objectives of the Ease of doing business are:
- To understand the existing laws, procedures and practices as well as the bottlenecks that impact the business
environment in Karnataka;
- To make recommendations for implementing suitable reforms in Karnataka to create a conducive environment for business to flourish in the State. It focused on the following aspects that impact the business climate in the State:
- Land Allotment by the Karnataka Industrial Areas Development Board (KIADB)
- Building Plan Approval.
- Approvals for Water Supply Connection.
- Commencement Certificate and Occupancy Certificate.
- NOC for Bank and Financial Institutions.
- NOC for KPTCL/ESCOMS.
There is a multiplicity of laws and institutions governing industrial development in Karnataka. There are central as well as state laws relating to land, labor, taxation, registration, pollution control, industrial facilitation, and regulation of water and power supply. These are administered by various government agencies such as the KIADB, BWSSB, ESCOMS, PCB, KUM etc.
The following three Committees deal with approval of investment proposals:
- State High Level Clearance Committee – investments above Rs 100 Crores;
- State Level Single Window Clearance Committee – Rs 15 Crores to Rs 100 Crores;
- District Level Single Window Clearance Committee – upto Rs 15 Crores.
KIADB promotes rapid development of industries in the state by acquiring land and forming industrial areas. It provides basic infrastructure like establishing roads, power and technical training centers. Price determination through a committee involving all stakeholders, including landowners.
Online Applications offered by KIADB provides:
- Simplified and expedited registration process, provides certificates for non-encumbrance and assists in market valuation of properties.
- Computerized land records, registration and title mutation process.
- GIS: One-stop access for Investors to know more about Investment opportunities.
- User-friendly features such as Payments through Net banking, Credit & Debit cards, status tracking, and SMS
alerts.
Land for the purpose of setting up an Industry in Karnataka can be acquired by the investors either directly from the Karnataka Industrial Areas Development Board (KIADB) or with the partial involvement of KIADB, where in the investors identify the land Available through GIS and seek the assistance of KIADB for acquisition of the land for a service fee. The number of attempts made by entrepreneurs while approaching KIADB for allotment of land and obtaining the Letter Of Allotment (LOA) is growing at a disturbing pace.KIADB has a land bank in GIS that could be accessed by the investors and allot land on First Come First Served (FCFS) basis.
KIADB acquires land for setting up industrial areas only after prior consultation with the jurisdictional Planning Authorities. KIADB hasindicate a time frame within which the land will be acquired and allotted to investors.Land Bank Data in KIADB is computerized and made more comprehensive it includes all data that the investor would require to take a decision. The investors have access to the Geographical Information System (GIS) data on the availability of land.
After checking the availability of land he can apply for Allotment of land online. The online submission of allotment of land Along with application fees. The submitted application is sent to the concerned Development officer for further process.
KIADB is the approving authority for building plans. The building plans have to be drawn as per the regulations in force and duly certified by an approved Architect. The online submission of building plans application through registered architects is done as a result the system is hassle free and approvals are obtained in the shortest time possible.
Similarly after Allotment of land and building plan approval the allotee can obtain Commencement Certificate and Occupancy Certificate by applying online.
Applicant can obtain NOC in favor of Financial Institutions, Banks and NOC in favor of KPTCL/ESCOMS through online portal in the website.
The water supply connection can also be applied online through online services and the concerned Development officer will receive the application and provide the necessary approvals.
All the investors after obtaining the in-principle clearance from KUM, they had individually approached the departments to obtain further clearances and KUM serves as a Single Contact Point and it accept the filled in Application form from the investors and hand it over to the respective departments for further processing and ensure prompt clearance. Further, KUM has an integrated service with the KIADB wherein it provides the necessary details of the allotee to KIADB application, the data is auto populated from KUM Application form hence the investor need not to fill in the details again. The investors can track the status of their application online Portal.
