A study of the Union Planning Commission on the status of business regulatory environment for manufacturing sector has ranked Tamil Nadu one among top nine States.

Six parameters have been taken into account for the purpose of the study and Tamil Nadu comes out on top in five out of six parameters. The five parameters are finance & tax related compliances; infrastructure & utility related approvals; land & building related approvals; environmental clearances and other business regulatory compliances. Tamil Nadu has been placed in the group of low-ranking States with respect to the parameter of labour law related compliances, according to the study report available on the official website of the Planning Commission (http://planning commission.nic.in).

The study, covering 28 States during September 2013-January 2014, was held in the context of the Commission’s identification of improvement of the business regulatory environment as a key enabling factor for achieving the growth aspirations of the manufacturing sector.

In the economy of Tamil Nadu, the share of the secondary sector is 30.24 per cent, of which share of manufacturing sector is 20.74 per cent, says the State Planning Commission. In 2009-10, the sector employed around 5.2 million, representing 17 per cent of the State’s working population, states the study.

A perusal of the report also reveals that there is no top-ranking State that has done exceedingly well in all the six parameters. Just like Tamil Nadu, others too scored lower rating in one parameter or the other.

TN-specific findings

According to the study, a majority of the respondents in the State expressed satisfaction about the processes concerning State VAT registration and payment; getting no objection certificates from the Fire and Rescue Services directorate and environmental clearances, besides availing themselves of land in industrial estates. The registration of Entrepreneur Memorandum has received a special mention as it, the report states, takes around one day.

As for labour law-related compliances, the report concludes that the process of inspection under the Factories Act is not based on “standard objective procedures.” However, a senior official of the Labour Department disputes this finding and says his department has been interacting with a number of industry bodies continuously which have not made any complaint about the process. The report recommends an online system for obtaining or renewing licences and documenting standard operating procedures to increase transparency and efficiency of the inspection process.

Six parameters have been taken into account for the study

The State comes out on top in five out of six parameters