'Inspection raj' in the country is causing concern to businessmen as also investors, particularly the non-resident Indians, according a study by the Federation of Indian Chambers of Commerce and Industry.
While central and state governments have put into place a mechanism for single window clearances for investments, 'inspection raj' is still prevailing in the country with as many as 134 inspections taking place on an average every year.
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FICCI secretary general Dr Amit Mitra, in his presentation on 'India's growth opportunity and the States: Defining the Benchmarks' revealed that the findings of a survey on various aspects of the Indian economy.
Inspections by environment authorities topped the list, followed by pollution control board authorities.
Interestingly, Gujarat Chief Minister Narendra Modi, while explaining the strengths of his state for investments, said that his government had withdrawn inspections in as many as 66 areas.
"Businessmen and industrialists know what type of inspections these officials do," he commented amidst laughter.
He said the GDP growth for the first half of the year 2005-06 had touched 8.3 per cent as compared to 1.3 per cent in 1991-92. Similarly, incidence of poverty declined significantly with the ratio of people below poverty line coming down to 19.3 per cent in 2006-07 (as per Tenth Plan projections) as against 38.9 per cent in 1987-88.
FICCI presentation also gave a bright picture on the Foreign Direct Investment front.
"India has overtaken the United States as an attractive destination for FDI to emerge in second position in 2004, as per A T Kearney FDI confidence index," Dr Mitra explained.
Highlighting the strengths of India, he said the country had over 3 million scientific and technical personnel. Similarly India turned out more than 50,000 computer professionals and 360,000 engineering graduates every year.
Other highlights of the FICCI presentation:
- 70 per cent of the foreign companies are making profits in their Indian operations.
- 84 per cent of the foreign companies have plans for expansion of their Indian operations.
- An impressive 91 per cent of the foreign companies perceive opportunities for further FDI in other own industry.
- Total infrastructure spending of $ 175 billion projected over 2005-2010.
- States have become key players in economic reforms with combined budget of the states in 2005-06 (Rs 567,835 crore) larger than that of the central government (Rs 514,344 crore).
State fiscal reforms are also showing results with the fiscal deficit coming down to 3.1 per cent of GDP in 2005-06 as against 4.2 per cent of GDP in 2000-01, and revenue deficit coming down from 2.6 per cent to 0.7 per cent during the same period.
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