State Level Best Practices for Investment Promotion

State Level Best Practices for Investment Promotion At present, 10 state-level best

practices are being studied by DIPP

These best practices will be carefully documented for nationwide replication

Sources used for identifying these practices include:

NIUA Study (2008) World Bank ‘Doing

Business’ report (2009) Surveys by CII Presentations made by

states

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Construction Permits

Property Registration

Paying Taxes

State-level Single Windows

Planned Industrial Development

Breakup of 10 Best Practices

Identified Best Practices

GIS System, Bhubaneshwar Development Authority

E Stamping, New Delhi

Land Acquisition Package,Haryana

Water & Sewerage connection and Occupancy Permit, Greater Noida

Registering, filing & payment of state V.A.T and CARD, Andhra Pradesh

Standardization of Property Documents, Rajasthan

SIR Ordinance, Gujarat

Single Window System for Industries, Orissa

List of Best PracticesProcedure Best Practices Key Feature

1. Issue of Construction Permits by Area Development Authority.

‘GIS System’ of BDA (Orissa)

Comprehensive development plan for the town was integrated with Remote Sensing maps to prepare up-to-date land use map

2. Water & Sewerage Connection Greater NOIDA (UP)

Provision of water connection with all civil works is done before giving possession to allottee

3. Occupancy Permit ‘Architect on Record’ of Greater NOIDA (UP)

Approvals given on certification by Registered Architects

4. Registration, Filling and Payment of State V.A.T

Andhra PradeshSimplicity in Registration, electronic filing of return & payment of taxes

5. Encumbrance & Title Verification

CARD of Andhra Pradesh

Search of Title, Property Registration & Valuation are done electronically

List of Best PracticesProcedure Best Practice Key Feature

6. E-Stamping Delhi Secured electronic payment of stamp duty

7. Standardization of Property Documents Rajasthan

Ease of preparing property documents due to standardization of property documents

8. Land Acquisition Package Haryana

The land owners will be paid annuity for 33 years over & above the usual land compensation

9. Single Window System for Industries Orissa

Submission of composite application and single nodal point of contact

10. SIR Ordinance GujaratTo facilitate development of economic hubs as per global standards

Best Practices Relating to Construction Permits

Geographic Information System (GIS) - BDA

• GIS was developed by BDA for capturing,

managing & analyzing geographical

information such as types of land, census

tracts, sites, roads, buildings etc.

• Comprehensive development plan for the

town was integrated with Remote Sensing

maps to prepare up-to-date land use map

• Digitalization of BDA Development plans

using GIS system first implemented in

1999 and subsequently updated

constantly

Geographic Information System (GIS) - BDA

Key Benefits to Public• It is fastest to obtain land use permission (1 day) in Bhubaneshwar

In India on an average it takes 16 days to obtain land use permission

In Bhubaneshwar, it used to take 50 days to obtain land use permission

Key Benefits to Government• Helps State Revenue Authority to know the up to date

status of land utilization • Effective development control and reduction in

unauthorized constructions

GIS System - Bhubaneshwar Development Authority

Legal & Administrative Changes The Orissa Development Authorities Act, 1982 was revised to give legal status to the GIS

system

Land use information cell was established to provide information related to land use and building byelaws to the public

Proper training was provided to staff to use new computerized system

Technology Maps were digitalized using ARCINFO and ARC VIEW software

Financial Implications Project was funded by BDA internal funds

Recovery of cost planned through user fees (i.e. 100 Rs/ User)

Water & Sewerage Connection - GNIDA

Key Features• Provision of water & sewerage connection with all civil works are done before giving possession to

allottee.

• Design / Specification / Modules for water & sewer connections institutionalised according to land-use and plot sizes

• GNIDA using this practice since 1998-99

• Layout for sectors along with detailing of Water & Sewer connections to individual plots are pre planned

Key Benefits to Public• It is fastest to obtain water and sewerage

connections (7days) in Greater NOIDA

In India on an average it takes 16 days to obtain permanent water & sewerage connection

Key Benefits to Government• Pre-possession of connections avoids repetitive

road cutting at later stages

Architect on Record – Greater NOIDA (GNIDA)

Key Features GNIDA empowers the architects registered with the Council of Architecture (COA) for

sanction/ approval of Building Plans/ Occupancy Certificate on individual residential plots allotted by the authority

GNIDA using this practice since 2003 Acknowledgement of application along with checklist to the authority deemed as receipt

of Occupancy / Completion Certificate

Key Benefits to Public• Immediate grant of occupancy permit

approval facilitated by third party certification

Key Benefits to Government• No separate staff to be engaged for

granting occupancy permit

• Also no payment are required to be paid to architect by GNIDA

Best Practices Relating to Paying Taxes

Registration, Filing & Payment of State VAT in AP

Key Benefits to Dealers• Registration certificate is issued within 24

hours in case of non risk dealers• Dealers are not required to pay fee and

security deposit at the time of registration• Simplicity due to electronic payment and

filing

Key Benefits to Government• There was a 20.21% growth in tax revenues

after implementation of this system.

• Cost of tax collection came down significantly

Key Features• Registration certificates are issued through VATis, an online software application• e-Registration application software has been developed and will be launched shortly. This

will help dealers to apply for V.A.T registration online ( Internet)• Dealers can file the return through internet and e-seva centers• Dealers can view the details of returns and the payments filed by them through the internet using ‘Dealer ledger’ application facility

Registration, Filing & Payment of State VAT in AP

Legislative and Administrative changes• The Andhra Pradesh Value Added Tax (V.A.T) Act, 2005 came into force on 1 April 2005

• The V.A.T Act in Andhra Pradesh is administered by the Commercial taxes department (department to collect VAT and other taxes)

• Training was provided to tax officials prior to implementation of V.A.T

Technology• Custom build software was developed to handle registration, filing & to accept payment of

V.A.T

Best Practices Relating to Property Registration

Computer Aided Registration of Deeds (CARD) - AP

Key Features CARD is a simplified and decentralized digital property registration system through 200

Sub- Registrars’ offices (SRO) of Andhra Pradesh

This system simplifies and expedites the registration process, provides certificates for

non encumbrance and assists in market valuation of properties

In 1997 CARD system was introduced in two SRO

In 1998 CARD system was extended to about 432 SRO

CARD was adjudged one of the ten finalists in the International Innovation awards 2000


Key Benefits to Public• Approximately 1 day is required to register property under CARD system

Earlier it used to take approx 17 days to register property

Key Benefits to Government• Land revenue growth of 19.75% was

recorded in the year preceding when CARD system was introduced

• Within Six months of the launch of the CARD project, about 80% of all land registration transactions were carried out electronically

3.32

9.76

19.75

% Growth (in net revenue)

1997-98 1998-99 1999-00

AP Land Registration Revenue, 1997-2000


Legal & Administrative Changes The Registration Act, 1908 (Central Act), in its application to the state of AP, was amended to facilitate

for the following: • The process of registration of any category of documents may be completed and copying

done with the help of electronic devices like computers, scanners and CDs and copies preserved and retrieved when required.

• Copies of documents registered and stored electronically, retrieved, printed and certified by the sub-registrar shall be received as evidence

• The software to be used for registration shall be prescribed by the Inspector General. SROs were divided into 3 categories based on the number of documents registered and the revenue

derived from each office. One to three weeks training was organized for different categories of officers ( cost 9% of total project

cost )

Technology A 386 server operating with 14 terminals was set up at a cost of about $31,000 (Rs 13.3 lakh)

Financial Implications Initially USD US$3 million (Rs.13 crore) were spent.

E Stamping - Delhi

Key Features E Stamping is computer based stamping of documents where record keeping agency

maintains the database electronically instead of physical stamping of documents which could be forged or duplicated

Have special Security features such as optical watermark, 2D Barcode and microprint (superfine printing of important details invisible to naked eyes)

Delhi government introduced E-stamping since 1st Apr 2008 Prevented circulation of Fake Stamp papers in market

E Stamping - DelhiKey Benefits to Public

No fear of fake paper or forgery. The certificate generated is tamper proof

Certificate generated has a Unique Identification Number

Key Benefits to Government Curbs the revenue loss in future due to fake or forged stamp

papers Saving on the cost of printing and handling of Stamp papers The new system generate the audit trail, MIS reports, verify

certificate

Standardization of Property Documents -Rajasthan

Key Benefits to Public Ease of preparing property documents due to standardization of property

documents Enables self preparation of property registration documents

Key Features• Bureau of Investment Promotion of Rajasthan introduced 34 types of standardized

property registration documents

• This practice was implemented under Sarathi project which was initiated in 2003

• Time for entire process of registration was brought down from 72 hours to 25 minutes

Best Practices for State Level Single Windows

Single Window Clearance - Orissa

Key Features 18 out of 20 major approvals / clearances are provided

through single nodal point by using a Combined Application

form (CAF)

Provision for deemed approval by department/ authority, in

case the approval is not granted within the time limit specified

by GoO under Orissa Industrial (Facilitation) Rules


Key Benefits to Private Firms• Time Bound Clearances – Faster

clearances Concerned authority process the

application and communicate its decision to the nodal agency within the time limit specified (not to exceed 30 days from set time limit)

Key Benefits to Government• Higher industrial growth will contribute to

overall economic growth

• High rate of Orissa’s Economic growth through industrialization The economic growth rate is up from 4

% in the 1990s to about 8.5 % over the past five years


Legal & Administrative Changes Orissa Industries Facilitation Act (OIFA) 2004 was introduced to facilitate single window industrial

clearance Industrial promotion and Investment corporation of Orissa Ltd. (IPICOL) was designated as state level

nodal agency and high level clearance authority DIC was designated as District level Nodal Agency OIFA envisages a three-tier approval mechanism for according expeditious clearance to industrial

projects based on the level of investment. • District Level Single Window Clearance Authority (for investments up to Rs. 50 crore)• State Level Single Window Clearance Authority (for investments more than Rs.50 crore but less

than Rs. 1,000 crore)• High Level Clearance Authority (for investments more than Rs. 1,000 crore)

Financial Implications Govt. of Orissa charge process fee within Rs.l.00 lakh to Rs.2 .00 lakh depending on

the value of the application


Source: CII telephonic discussions with Team Orissa and State Presentations

Need for Single Window Clearance in Orissa Approximately 20 approvals are needed to set up an Industry in Orissa. To transform the state from a ‘lagging state’ to a rapidly developing industrial State.

Project Clearance

Annual Inspection

s

Annual Inspection

s

Project Clearance

Secretarial Services Project Appraisal Reports

Consultation & Escort Services Nodal

AgencyInvestors Concerned Departments

Clearance Authorities

Post Implementation Facilitation

Best practices for Planned Industrial Development

Rehabilitation & Resettlement of Land Owners - Haryana

Key Features Under this the developers are liable to pay Rs.30,000/- per acre per annum with annual

increase of Rs.1,000/- per acre for a period of 33 years for the land acquired for setting up of SEZ, technology city and park

In case of acquisition by the State Government, the payment shall be Rs 15,000 /acre per annum with an annual increase of Rs 500 / acre

The allotment of Plots will be made to each co-sharer depending upon his share in the land acquired for HUDA and HSIIDC as per scale mentioned in the entitlement

This policy is applicable to all those lands where award of compensation was announced on or after 5th March, 2005

Rationale for This Policy• To facilitate private sector developers to acquire land for industrial/ commercial purpose


Key Benefits to Land Owners Other source of long term sustainable income in form of fixed annuity Provision of yearly increment In addition to the residential plots, commercial sites, measuring 2.75 X 2.75 mtrs. will be

allotted in HUDA sectors• Such allotment shall be made to each co-sharer provided his share exceeds 2.5 acres, otherwise

all the co-sharers will be allotted a single site

Key Benefits to Private Developers State Government assists in the acquisition of land for all the joint venture projects for

development of SEZs The State Government also assists in acquiring left out pockets to ensure contiguity of

SEZs.


Key Benefits to Government Facilitates land acquisition by private sector - will boost industrial infrastructure

development in Haryana

As a result of Policy for Rehabilitation & Resettlement of land owners, many private

sector players have shown interest in the state for developing Industrial Model

Townships, Industrial Parks and Technology Cities through private initiatives as well

as in public private partnership

SIR Act 2009 - GujaratWhy SIR Act ?

Around 38 % of the Delhi-Mumbai Industrial Corridor (DMIC) fall in Gujarat

As part of DMIC, six mega industrial nodes (four industrial areas and two investment regions) have been proposed to be set up in Gujarat

On 6th January, 2009, the Gujarat Government promulgated a legal framework – The Gujarat Special Investment Regional Ordinance, 2009

SIR Act 2009 - GujaratKey Features

The Ordinance enables to establish, develop, operate and regulate the Special

Investment Regions in Gujarat

The state government is empowered to declare Investment Region or Industrial

Area and designate them as Special Investment Region (SIR) by notification

An Investment Region will be developed in an area of more than 100 sq. kms and

an Industrial area will be developed in an area of more than 50 sq. kms

The Ordinance provides for effective internal dispute settlement mechanism by

setting up a three tier system.

SIR Act 2009 - Gujarat

Legal & Administrative Changes The proposed structure under SIR Ordinance will comprise of an Apex Authority (GIDB), a Regional Development Authority (RDA) for each region, a Project Development Agency and project specific SPVs. The Apex Authority and RDA will make provisions for development, operation, regulation,

management, planning and to grant permission and approval for any economic activity or amenity to be established in the SIR

Key Benefits to industry/ projects

The ordinance provides for a single window clearance system

• The Apex Authority- the GIDB will be the point of contact for establishing an economic activity, infrastructure or amenity in the SIR

Key Benefits to Government It Will help government to set up world

class hubs of economic activity on the

lines of fast growing countries of the

world