Haryana has come a long way in terms of industrial reforms that facilitate investors, climbing up from 14th spot in “ease of doing business” in 2016 to the third position in the year 2018. Some of the reforms include implementation of a Single Window Clearance system, relaxation in labour laws, faster environmental clearance etc. This article will highlight some of the key reforms undertaken by the state government to attract investment and the challenges, which hamper the investment climate in Haryana alongwith some recommendations, which could further improve the conditions for doing business in the State.

 Background :

• Haryana has transformed itself from a State only known for its agricultural production to a state known for attracting Fortune 500 companies. The state’s  growth and development trajectory has been progressive since its formation as an independent state. It has set the example for planned economic development and has emerged as one of the leading Indian states in terms of per capita income.
• With one third of the State falling under the National Capital Region (NCR), Haryana has been able to attract sizable investments. The state has vast resources supporting its huge potential in the agro-based sectors.
• Haryana is one of the most economically developed and industrialised states of India. It has a strong foothold in the knowledge-based industry including IT and biotechnology. Textiles, food processing, automobile and auto components are the other key sectors.
• In 2015, Haryana ranked 14^th with a score of 40.66 percent in terms of the implementation of factors to improve ease of doing business in the state.Towards end-2015, the conversation in the corridors of the Haryana State Industry and Infrastructure Development Corporation (HSIIDC) office began centring on steps being taken to improve ease of doing business.
• Since 2015, the DIPP has been tracking the reforms undertaken by all states through a real-time online evaluation portal. Notably, out of a total of 340 parameters of evaluation laid down by the DIPP, Haryana implemented 318, with an implementation percentage of 96.95 percent. As a result, Haryana propelled from its earlier ranking to reach the 6^th position in India in 2016.The goal of being in the top three was achieved in 2018.

Major Reforms taken by Haryana Government :

• One of the major steps taken was the notification of The Haryana Enterprises Promotion Bill in 2016, with an objective of simplifying the regulatory framework, giving investors single point and time-bound clearance to set up new industries.
• Haryana Government constituted the Haryana Enterprise Promotion Centre (HEPC), a two-tier system for project clearances and a first-of-its-kind body that gives 70 different approvals under one roof.
• HEPC has brought together approvals from several different departments, such as departments of labour, forest, the state pollution control board, town and country planning, under one roof.
• A leading investment reform in Haryana is the introduction of the ‘single roof’ system modelled on the Invest Punjab initiative. Under the single roof system, “clearances for projects with more than Rs.10 crore investments and involving Change of Land Use (CLU) in respect of more than one acre land would be cleared by the Empowered Executive Committee under Principal Secretary to Chief Minister under one roof”. This would ensure time-bound clearances for investment projects.
• The onus of clearances and approvals has been changed and now it rests with concerned officials of a department, rather than the investor. And there’s a 45-day time period, after which the investor gets deemed clearance.
• HEPC has received 36,000 applications since it was formed in 2016. The idea was to ensure HEPC is the sole entry and exit point for anyone looking to set up industry in Haryana. 
• The next thing on agenda was to increase transparency in processes. Hence, all approval and clearance processes were taken online, which led to smaller time-frames and deadlines for all kinds of processes. Investors can now track status of their applications in real time on the HEPC website, with the department even disclosing internal procedures.
• In case of processes not covered under HEPC, timelines were considered as per the Right to Service Act.
• The shift to online processes allowed the government to cut down physical interaction between officials and investors. No inspections can be carried out without the permission of the head of the department thus further reducing corruption at lower levels.
• The Haryana Government has announced plans to bring a new land acquisition act and acquire land as per it, so that no land can be acquired without the consent of farmers in the State. 60 days has been specified as the timeline for land allotment in Haryana Right to Service Act 2014.
• Investment Wizard was developed by INVEST HARYANA Portal to inform investors about the regulatory clearances needed for their projects. The facility is available under Know Your Clearance section.
• Procedure and comprehensive checklist of No Objection Certificate (NOC) in respect of Punjab Land Preservation Act,1900 (PLPA, 1900) or Forest or Restricted Lands & Permission of Felling of Trees is available on the department website under Forest Clearances section.
• The procedure and list of documents for obtaining Consent to Establish (CTE)under The Water Act 1974 and The Air Act 1981 is present on the website of the Haryana State Pollution Control Board.
• The government also introduced reforms in departments of labour and environment, allowing self-certification in “low-risk industries”.
• Along with a three-tier grievance redress system, monthly meetings headed by the deputy commissioners where all industry-related grievances are taken up.
• For low risk categories, companies can upload self-certification in areas that require labour, environment and department clearances within 48 hours.
• Haryana is one of the states, which has signed the Goods and Services Tax (GST) bill that aims to attract investment in India by simplifying the tax regime in the country; consequently, Haryana also set up a task force for successful implementation of GST in the State.
• China Fortune Land Development (CFLD) has entered into a joint venture with HSIIDC to develop an industrial township in Gurgaon.The Haryana Government plans to establish automobile and electronics industries in the proposed township, which is expected to generate employment for millions and also provide healthcare and education facilities.

Challenges :

Despite, the plethora of EoDB reforms introduced by Haryana, there are certain  challenges, in terms of actual implementation of reforms and various other aspects, which are beyond the DIPP’s EoDB parameters of ranking of the states. Some of the challenges were brought forth during the stakeholder interactions in Haryana held as part of the project by CUTS International namely ‘Evaluation of Competitiveness among North Indian States’.

Social challenges and impact on investment :

• Social challenges in Haryana always remain a key concern area which also impact investment in the state. Social unrest, such as the recent Jat reservation agitation, which occurred shortly before the Happening Haryana summit could give the State a bad name in terms of potential investment opportunities. As per Associated Chambers of Commerce & Industry of India(ASSOCHAM) observations, the Jat agitation in Haryana had dealt an estimated blow of Rs.18,000 - Rs.20,000 crore by way of loss to public and private property and resulted in halting trade, industry, small business and transport. Such incidents mark a huge loss of confidence among investors to set up industries in this area.

Lack of balanced developments :

• Huge regional disparities exist among various districts in Haryana in terms of economic development. The State Government’s focus on development has remained on the region comprising NCR; as a result, other districts are not as developed as cities like Gurgaon and a significant difference in income levels exists between the two.

Labour strikes :

• When the State government had promulgated labour reforms (including relaxed norms for lay-off and retrenchment of factory workers) in March 2016, various trade unions and labour unions, such as Bhartiya Mazdoor Sangh were unhappy with the reforms. Some factory workers had even gone on strike; labour strikes/labour unrest can be a significant challenge to investors’ interests in the State. Labour unrest is prevalent in Haryana and other states in India over the exploitative condition of workers; strikes by factory workers can cause the business of investors to come to a stand-still.

Recommendations :

Reforms to develop non-NCR region of Haryana :

• The government should focus on developing cities in Haryana, which do not fall in the NCR region. Land is cheaply available in the rural and less-developed regions of Haryana but investors would not be able to seize this opportunity, if proper infrastructure is not present in those areas. Therefore, Haryana should develop not only smart cities but also smart villages.

Need for labour reforms :

• There is a need for state governments to intervene and address the labourers’ concerns through amendments in the law. While it is important to relax labour norms for businesses to operate with ease, the legal norms must not be inadequate to protect workers’ interests, since this would provoke labour strikes and cause loss to investors.

Controlling law and order situation :

• Investors are attracted to states with good law-enforcement mechanism which offers a stable investment climate. The Government should enforce law and order more strictly in the State so that investors do not suffer losses due to public agitation like the Jat reservation agitation.

Regulatory Impact Assessment :

• Regulatory Impact Assessment (RIA) is an ex-ante systematic approach of assessing the positive and negative effects of regulations which are being considered by the government but have not come into effect. RIA also includes an ex-post assessment of the current regulations. Through conducting RIA, the government can ensure that its regulations are conducive to support its objectives of EoDB reforms. It offers an introspective evidence based methodology to policy making wherein the government can bring in effectual changes in regulations which are not in sync with the EoDB reforms.

Way Forward :

• Haryana government has taken bold reforms to ensure Haryana as a favourite for investors. However, there still are a few areas where there is need to do more work. Even though online processes came with a benefit, the additional challenge was to ensure these processes were user-friendly, and providing door-to-door delivery of services to investors.
• This year besides the compliance of reform questions, hundred per cent feedback of consumers getting various services would also form the basis of the ranking. So, at the time of giving service through the portal of Haryana Enterprises Promotion Centre (HEPC), the consumers are asked to give feedback whether they are satisfied with the service delivery or not.
• Even though industrialists are a little sceptical whether the sudden jump in rankings matches the pace of changes on ground, the regulatory and procedural reforms can hardly be refuted, at least on paper.
• The state government is ensuring hundred per cent compliance on Business Reform Action Plan - 2018 to further improve the state's Ease of Doing Business (EODB) ranking. The state focus is to be number one by 2019.