The government should formulate a 'use it or lose it' policy to free up land holdings for industrial use in a bid to improve business environment, the Economic Survey said today.
Besides, the pre-Budget document also suggested that the other short term measures, which can be used by the government to enhance business environment include review of the existing regulatory landscape for outdated regulations, strengthen grievance redressal against inspections among others.
"The government could institute a 'use it or lose it' policy to free up locked land, which can be used for industrial estates, common facilities, incubators, etc," said the Economic Survey, for 2013-14 tabled by Finance Minister Arun Jaitley in Parliament today.
The document added that a lot of land is held by developmental authorities, Public Sector Undertakings (PSUs) and large firms. These land banks stay unutilised.
"The existing separation of land into commercial and residential plots is detrimental to setting up micro, small and medium enterprises (MSMEs). One solution would be to designate land for mixed use and make it available to micro enterprises when they start out.
"Another would be to create pre-approved blocks in new industrial zones, where permission for a wide variety of activities has been obtained," it said.
It added that over the next few years the government, both at the Centre and in states, has to consider ways to improving the business environment for small businesses.
Giving example, the Survey said Ebiz portal set up by the Department of Industrial Policy and Promotion (DIPP) has already done some work which can be built on. Over time, the website can also carry best practices from across states.
"While, the long term solution is a wholesale revamping of the laws and regulations governing business, a number of steps can be taken in the short term, and a number of policy experiments could be initiated for the long term," it said.
On the long term steps, the document said that Indian legislation governing business needs to be "thoroughly revamped".
"A committee could be constituted with the mandate to propose a more streamlined and modern set of laws, especially in the areas of taxation, labour, environment and safety," the Survey said.
Preliminary work can be started, but in controversial areas, the focus has to be on building consensus for the time being, it added.
The Economic Survey suggested that in the mid term the government should ask states to share best practices on business regulations and see what can