Red tape is a bureaucratic process in which a number of official rules and procedures need to be followed in order to execute a plan, like starting a business and registering a property, etc. India is considered as one of the most difficult countries in the world for doing business due to the red-tapism, which means filling of numerous forms, paying fees in different government offices, and waiting for days to get the final approval. The Organisation for Economic Co-operation and Development (OECD) has urged countries like India to simplify the cumbersome procedures in order to quicken the time between the approval and starting of important developmental projects. Haryana, for the past few years, has been trying to shorten the time of administrative approval, but challenges still lie ahead.
According to a report of June 2012, there are about 12 steps or procedures for gaining approval for starting a business in Gurgaon in Haryana. This takes an average of 33 days for completion, and one needs to fill out several forms for getting clearance for environment, power, finances, construction, water and value added tax, etc. This is much higher than the procedures followed in other developing countries like Rwanda and Armenia, where the number is less than five. Again, for dealing with construction permits, there are 19 procedures to go through and this could take about 110 days. And if a contract needs to be enforced, one needs to follow 46 procedures and wait for 1,163 days.
However, owing to the extended procedures and clearance required from various public authorities, important projects that could provide water supply or construct a hospital or school in a rural village in Haryana, are stalled because of delay in getting clearance from one authority or the other. According to reports, some of the projects that were started around 10 years ago have still not reached their completion stage because of delay in getting clearance from certain public agencies. There have also been cases where people had to pay bribes to bureaucrats to help accelerate the time-consuming procedures.
Such bottlenecks due to red tape have thus made foreign investors skeptical to do business in India. Even those who had invested in big infrastructural projects backed out due to clearance delays. These have consequently affected the economic growth of Haryana and India. Therefore, it is imperative to simplify the procedures followed by the state's administration.
One of the better ways of simplifying the administrative procedures that cause delays is to create a system for providing the single window clearances. This can help reduce the number of hands a project has to go through before its approval, which eventually results into faster projects roll-outs. The government of Haryana has tried to implement the single window approach, but it still needs more fine-tuning to make it efficient and transparent. Using the online system may be a great way to achieve efficiency. Another significant step towards simplifying the approval and clearance procedures is to charge a single fee for the entire process. Naya Haryana's economic growth is therefore dependent on faster clearance of developmental projects and this can only be brought about by cutting the traditional red tape.