Rajasthan becomes 6th State to complete ease of doing business reforms

Context

Rajasthan has become the 6^th State in the country to successfully undertake “Ease of Doing Business” reform stipulated by the Department of Expenditure, Ministry of Finance.

What does it mean?

• Rajasthan has now joined the five other States namely, Andhra Pradesh, Karnataka, Madhya Pradesh, Tamil Nadu and Telangana, who have achieved this feat.  
• The State has become eligible to mobilise additional financial resources of Rs. 2,731 crore through Open Market Borrowings.

How the Ease of doing business reforms is significant?

• The ease of doing business is an important indicator of the investment friendly business climate in the country.
• Therefore, the Government of India had in May 2020, decided to link grant of additional borrowing permissions to States who undertake the reforms to facilitate ease of doing business.
• As a result, it has got the permission to mobilize additional financial resources from the Department of Expenditure.
• Improvements in the ease of doing business will enable faster future growth of the state economy.

What are the stipulated categories for ease of doing business reforms?

• Completion of first assessment of ‘District Level Business Reform Action Plan’
• Elimination of the requirements of renewal of registration certificates/approvals/licences obtained by businesses under various Acts
• Implementation of computerized central random inspection system under the Acts wherein allocation of inspectors is done centrally, the same inspector is not assigned to the same unit in subsequent years, prior inspection notice is provided to the business owner, and inspection report is uploaded within 48 hours of inspection.          

Why and what reforms were introduced?

• In view of the resource requirement to meet the challenges posed by the COVID-19 pandemic, the Government of India had in May, 2020 enhanced the borrowing limit of the States by 2 percent of their GSDP.
• Half of this special dispensation was linked to undertaking citizen centric reforms by the States.
• The four citizen centric areas for reforms identified were:
  1. Implementation of One Nation One Ration Card System
  2. Ease of doing business reform
  3. Urban Local body/ utility reforms
  4. Power Sector reforms