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Friday, September 17, 2021

Right to business rules: Year on, industry says doing business not easy, point to lacuna in implementation

“Had it been implemented rightly, the investment could have been manifold,” said Tushar Jain, chairman, Confederation of Indian Industry, Jalandhar Council.

Written by Navjeevan Gopal | Chandigarh |
July 25, 2021 9:01:30 am
Under the Punjab Right to Business Rules 2020, seven approvals/clearances pertaining to sanction of building plan, issuance of completion certificate, registration of trade license, change of land use, no objection certificate from the department, approval of factory building plan and registration of shop or establishment for the new unit shall be granted. (Representational)

A year after Punjab government notified Right to Business Rules and claimed to have snagged investment worth Rs 437 crore, the industrialists remain a disillusioned lot with some of them complaining that the move did not translate into promoting the industry as was expected.

“Had it been implemented rightly, the investment could have been manifold,” said Tushar Jain, chairman, Confederation of Indian Industry, Jalandhar Council.

Jain said the Right to Business Act and Rules notified by the Punjab government was “a wonderful gift but with strings attached”.

Jain rued that under the new rules, the industrialists had to pay upfront fee against various clearances. “The government move appears to be aimed at revenue generation. The amount for different approvals being asked to pay upfront should be charged at the time of obtaining regulatory approvals. And the field staff should act as facilitator, not as stumbling block,” said Jain, who set up a auto-component export oriented unit in Jalandhar on 2.2 acres but complained that there were hiccups at various levels to get the clearances.

To ease the regulatory burden on newly incorporated Micro, Small & Medium Enterprises (MSMEs), Punjab Right to Business Act 2020 was notified on February 6, 2020 and subsequently Punjab Right to Business Rules 2020 were notified on July 29, 2020. Under the Act, the District Bureau of Enterprise has been empowered to issue ‘certificate of in-principle approval’ to the units being set up in approved industrial park within three working days after the submission of declaration of intent by the applicant. For areas outside the industrial park, the certificate of in principle approval, as per the Act, is to be issued within 15 working days. Under the Punjab Right to Business Rules 2020, seven approvals/clearances pertaining to sanction of building plan, issuance of completion certificate, registration of trade license, change of land use, no objection certificate from the department, approval of factory building plan (except for industries involving hazardous process) and registration of shop or establishment for the new unit shall be granted by the district level nodal agency headed by the deputy commissioner.

As per ‘Invest Punjab’ Chief Executive Officer (CEO) Rajat Aggarwal, after the Right to Business Rules were notified, 55 applicants had been granted ‘certificate of in-principle approval’, which is valid for a period of three and a half years and the concerned unit should apply for regulatory approvals not later than three years. As per Aggarwal, the industrialists had invested Rs 437 crore and generated an employment for 3,738 persons in 14 districts of Punjab in the fields of pharma, textiles, steel, food, engineering, chemicals, batteries, cotton, electronics, health, plastic, rubber, wood, logistics and other services.

However, Mohali based Shamsher Sandhu of M/S Lodestone Developers & Infra said he was struggling to get the CLU certificate for around two months after applying. Sandhu said, “I got the in-principle approval well in time in 13 days to start the business. But, I am waiting to get the CLU certificate for two months now after applying for that. To set up the unit, I have to invest Rs two crore on construction and Rs ten crore to make it functional. What if I don’t get CLU certificate after making this investment? So, I have put the investment on hold. Instead of 15-day window for issuing in-principle approval, the government may take six months, but all the procedural approvals should be cleared by that time,” said Sandhu, who planned to set up an agro based ripening plant on two acres of land in Lalru of Mohali.

A Punjab government functionary, wishing not be named, said that the Right to Business Rules were “aimed at ensuring ease of doing business for the industry and the fee to be paid by the industrialists was a standard norm to which they never objected”.

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