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 134 out 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 Approval.
- Approvals for Water supply Connection.
- Commencement Certificate and Occupancy Certificate
- Environmental Clearance