Workshop on The NCAER 2018 State Investment Potential Index N-SIPI 2018

Transcription

1 Workshop on The NCAER 2018 State Investment Potential Index N-SIPI 2018 The NCAER Study Team August 3,

2 Structure of Presentation 1. Background and scope of project 2. The six pillars of N-SIPI 3. Introduction to pillars 4. Overall ranking under N-SIPI 2018 and trends 5. Perceptions pillar

3 Background and Scope 3

4 The global context: growth and competitiveness Global Trends in the Economic Policy Uncertainty Index (EPU) India is the third largest market in the world India the fastest growing economy in the world in 2018 at 7.3 percent GST was introduced in April last year. The average GST revenue in has been impressive, at Rs. 89,885 crore The Global Competitiveness Index ranks India at 40 th place 0.0 Jan'14 Jan'15 Jan'16 Jan'17 Jan'18 June'18 India EPU Global EPU China EPU The World Bank s Ease of Doing Business ranks India at 100 th place 4

5 N-SIPI and the World Bank/ DIPP Index N-SIPI focuses on the policy and structural backdrop that determines business environment in a state. Ranks states on comprehensive score based on six pillars The World Bank/DIPP Index assesses procedures to facilitate ease of doing business and transactions. Ranks states based on the progress on a 405- point action plan on business reforms N-SIPI therefore complements the work of the World Bank and DIPP Both induce state level competitiveness and performance 5

6 N-SIPI-The journey There is a rising spirit of competitive cooperative federalism entailing healthy competition among states in all spheres of business, including in the sphere of attracting investment As a result, states are now vying with one other in their effort to make it easier to do business and attract investment NCAER s initiative in this direction N-SIPI 2016 : NCAER formulated and presented the first State Investment Potential Index N-SIPI 2017 : NCAER modified and presented the second State Investment Potential Index N-SIPI 2018 :NCAER conducted a panel survey Reliable, Consistent and Annual Go-to Index for policymakers and business

7 What s new in N-SIPI 2018 Building on the success of N-SIPI 2016 and 2017, this third edition improves its methodology in ranking states A unique feature of N-SIPI 2018 is the inclusion of questions on GST and e-way bill in the perceptions survey to examine the impact of the new tax policy on businesses and its implications for investment in different sectors of the economy. Makes survey methodology more robust.

8 Six pillars of N-SIPI

9 Introduction to the six pillars

10 Number of Stalled projects (higher value implies lesser stalled prpjects) Industrial GSVA as % to Total GSVA Pillar 1: Land Availability of Land for Industrial Purposes and Industrial GSVA Ease of Land Acquisition and Stalled Industrial Projects AVAILABILITY OF LAND FOR INDUSTRIAL PURPOSES Ease of Land Acquisition 10

11 Rankings: Pillar 1 (land) 2018 Trend Top 6 states Telangana Madhya Pradesh Tamil Nadu Kerala Andhra Pradesh Maharashtra Up (+1) Up (-2) - Up (+ 6) Up (+1 ) Up (+1)

12 Perception on easy labour laws Per capita GSDP Pillar 2: Labour Educated Workforce and per capita GSDP Number of Man-days Lost due to Strikes and Labour Laws Population with secondary level education or higher Number of man-days lost due to strikes (a higher value implies lesser number of man-days lost due to strikes) 12

13 Rankings: Pillar 2 (labour) 2018 Trend Top 6 states Tamil Nadu Andhra Pradesh Karnataka Uttar Pradesh Kerala Maharashtra - - Up (+ 2) Up (+3 ) Up (+1) Down (-2) 13

14 Perception of adequate power supply Industrial GSVA as % of Total GSVA Pillar 3: Infrastructure Road Density and Industrial GSVA Road Density Power Shortage and Availability of Power Supply Power shortage (higher value implies lesser shortage) 14

15 Rankings: Pillar 3 (infrastructure) 2017 Trend Top 6 States Delhi Punjab Maharashtra Haryana Kerala Tamil Nadu - Up (+2) Down (-1) Up (+2) - Up (+2) 15

16 Perception on tax policy transition to GST Pillar 4: Economic climate Perception on the economic climate 100 Industrial GSVA and perception of economic climate GST and Perception on Ease of Transition to GST GST as a percentage of non-agricultre GSVA Industrial GSVA 16

17 Rankings: Pillar 4 (economic climate) 2017 Trend Top 6 states Delhi Up (+1) Telangana Up (+4) Gujarat Down (-2) Maharashtra Up (+1) Karnataka Up (+2) Andhra Pradesh Up (+5) 17

18 Perception on Acquiring approvals Per capita GSDP Pillar 5: Governance and political stability Governance and per capita GSDP Governance index Stalled Projects and Perceptions on Acquiring Approvals for Business Environment related stalled projects (Higher value implies lesser stalled projects) 18

19 Rankings: Pillar 5 (governance & political stability) 2018 Trend Top 6 states Tamil Nadu Haryana Punjab Gujarat Madhya Pradesh Karnataka Up (+4) Down (-1) Up (+1) Down (-2) Up(+3) Up (+1) 19

20 Pillar 6: Perceptions Unique component of N-SIPI Constructed using extensive and scientifically based industry surveys across 21 states The Perceptions Pillar forms the sixth pillar of N-SIPI Percent respondents finding getting approvals for land a problem 32% 14% 54% No Problem Moderate Severe 20

21 Pillar 6: Perceptions Law and order situation in the state Corruption in the state Difficulty in getting approvals for land Tax policy transition to GST Quality of skilled labour Getting all approvals before starting business Labour laws Sewage facility Access to finance Labour relations Availability of net connectivity Availability of skilled labour Availability of water Industry related policies Availability of unskilled labour Road / Rail quality/ connectivity Availability of raw material Availability of power Constraints Faced by Business (% Respondents) 21

22 Pillar 6: GST perceptions Respondents Reporting Problems Related to Tax Policy Transition to GST (%) 14.5 No problem Moderate Severe Respondents Perceiving the Impact of GST on Their Businesses (%) Better Same Worse

23 Rankings: Pillar 6 (perceptions) 2018 Trend Top 6 states Gujarat Haryana West Bengal Kerala Delhi Uttarakhand - Up (+2) Up (+18) Up (+3) Up (+1) Up (+10)

24 Overall Rankings under N-SIPI 2018 and Trends

25 Overall rankings under N-SIPI 2018: All Six Pillars 25

26 Dynamic shifts: Change in rankings in 2018 as compared to 2017

27 Dynamic shifts: Change in rankings in 2018 as compared to 2017

28 Dynamic shifts: Change in rankings in 2018 as compared to 2017

29 Dynamic shifts: Change in rankings in 2018 as compared to 2017

30 Perceptions Pillar-Survey Based

31 Survey objectives The N-SIPI Perception Survey is aimed to have - A better understanding of the constraints to business in the selected states at ground level The survey depicts perceptions emerging from their experience and involvement on the various aspects of reforms as captured through specific indicators at the firm level through the responses to the structured questionnaire both from the manufacturing and services sector units

32 Survey pillars & sub-pillars Land Labour Infrastructure Economy & Governance Business Environment Availability Procedural constraints Skilled Quality Unskilled Relation Laws Power Water Net Connectivity Sewage Road/Rail connectivity Industry policy Finance accessibility Raw materials Clearance Corruption Prospective business condition Own financial position Present investment climate Law & Order GST Tax policy transition Current level of operation

33 Survey features Spatial Spread 20 major States and Delhi Sample Size 1049 units, 44 districts Survey Period May-June 2018 Survey Method Responding units Questionnaire-based interviews MSMEs, large sized manufacturing and services firms

34 Basic observations For the first time, the CAPI method followed to collate the real-time data from the responding units Mostly a panel response carried forward from N-SIPI 2017 Higher share of small and medium-sized firms across major states Higher response ratio enables having improved perceptions through weighted responses

35 Survey coverage Ownership type Industry sector Private Limited Consumer Durable 39% 7% 1% 53% Public Limited Partnershi p/individu al Ownership MNC 30% 8% 4% 19% 21% 18% Consumer Non_Dura ble Intermedi ate Capital

36 Firm size distribution Manufacturing firms Service firms 35% 11% 10 to 100 crore 54% 100 to 500 crore 31% 33% 5 to 10 crore 10 to 50 crore 500 crore and above 36% 50 crore and above

37 Perceptions on land Problem acquiring land Difficulties in getting approval 86% 14% 14% No Problem Yes Moderate No 54% 32% Severe Overall Problem in acquiring land Problem in getting permissions/ approval Least Problem Andhra Pradesh Andhra Pradesh Himachal Pradesh Biggest Problem Uttarakhand Jharkhand Karnataka

38 Land constraints more for smaller firms compared with the larger ones Over 500 Acquiring land High to severe difficulty in getting approval

39 Business environment is optimistic Business environment Firms financial position 5% 5% 36% 59% Better Same Worse 37% 58% Better Same Worse Overall Business conditions Financial position Least Problem Telangana Telangana Karnataka Biggest Problem Bihar Maharashtra Punjab

40 Key constraints faced by small, medium and large businesses (% respondents) Corruption as a potential problem Acute transitional problem to GST Problem in getting approvals for starting business Difficulty in labour relations Law and order as a problem Difficulty in connectivity of surface transport Over 500

41 How states are compared and ranked There are five pillars for the N-SIPI perception survey and each pillar contains different sub-pillars The responding units answer to each of the question in the sub-pillar has been quantified The quantified response of each of the sub-pillar is totalled for each of the pillar and compared with the responses received from each of the states The overall position in the ranking is arrived by comparing the weighted average response of all the pillars across states

42 State positions in ranking of investment perception Achievers Front runners Potential to improve Gujarat Rajasthan Andhra Pradesh Haryana Madhya Pradesh Bihar West Bengal Uttar Pradesh Karnataka Kerala Chhattisgarh Telangana Delhi Jharkhand Maharashtra Uttarakhand Punjab Odisha Himachal Pradesh Tamil Nadu Assam

43 THANK YOU 43