Regulatory hindrance, lack of agri-policy, pending power sector reforms lead to fall
Assam has slipped three places from 17th to 20th rank when it comes to ease of doing business in a state in India. The dive signifies that “cosmetic” efforts to attract investment like Global Investors’ Summit are not paying much dividends when regulatory hindrances still exist.
The 4th edition of the ranking index released by the union finance minister Nirmala Sitharaman prepared by the Department of Industrial Promotion and Internal Trade (DIPIT) in association with the World Bank, analyses the Business Reforms Action Plan (BRAP) of each state of India and is a reflection of efforts made by each state in minimising the regulatory hurdles when it comes to ease of doing business.
Among other northeastern states, Mizoram and Tripura saw its ranking going up to 25 from 28 while Arunachal Pradesh improved its rankings to 29 from 32.
Sources in the Assam government said that that lack of an agriculture policy which demarcates industrial use land from crop land is the main stumbling block. This is the biggest regulatory hurdle when it comes to ease of doing business in the state.
Secondly, the availability of cheap commercial power is still an issue of major concern. Neighbouring countries like Bhutan and Bangladesh are offering power at much more subsidised rates which is attracting the industrial behemoths. There are about 14 Indian companies with investments in Bhutan. They are extremely keen to attract more investments from India. The regulations by the country have been made much more conducive allowing Indian investors by permitting investment in rupees.
The hydropower industry which could have emerged as a major investment attracting sector in Assam and other adjoining states in the region are crippled by regulatory hindrances and countries like Bhutan have marched forward on this front too.
Strangely, this time around, the ranking index does not provide the reform evidence score. Assam scored 92.41 per cent in 2017, which is way beyond the toppers like Andhra Pradesh, Jharkhand.
However, the slip in the rankings of northeast India’s most industrial state - Assam - is significant since the state is considered as the gateway to the northeast. Since the BJP stormed to power in 2014 in Assam, several initiatives were taken to attract investments in the state. “Invest Assam,” a global investors’ summit, was organised with much fanfare to attract big industrialists and industrial houses to the state to invest in sunrise sectors like petroleum, tourism, horticulture, health and handicrafts.
But the slip in the ease of doing business rankings tells a different story altogether. Just recently, Assam Industries Minister, Chandra Mohan Patowary, had urged the Centre to formulate a special and progressive policy similar to North East Industrial and Investment Promotion Policy (NEIPP) which should be exclusive to the region.