The Business Reforms Action Plan (BRAP)

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The Business Reforms Action Plan (BRAP) is an initiative launched by the Indian government to enhance the ease of doing business and improve the overall business environment across the country.
What are the main aims and objectives?

BRAP's main objectives include simplifying regulatory processes, reducing compliance burdens, implementing digital solutions, and enhancing transparency and efficiency in business-related procedures. The initiative seeks to foster competitive federalism among states, create multiple investment hubs nationwide, and boost investor confidence in India's business landscape. BRAP aims to establish a seamless business regulatory framework across India, making it a preferred global investment destination. 

How does the program work?

Led by the Department for Promotion of Industry and Internal Trade (DPIIT), BRAP consists of a series of annual action plans where states are evaluated on their reform efforts. BRAP works by introducing a set of reform points covering various business regulatory areas, such as labor, environment, taxes, land administration, utility permits, inspection, and construction. The 2020 edition, for instance, included 301 reform points across 15 regulatory areas. States and Union Territories are then assessed on their implementation of these reforms, creating a competitive environment that fosters improvement and innovation in business regulations.

The evaluation process has evolved over time. Initially, it was based on evidence of reform implementation, but recent editions have incorporated user feedback to gauge the actual impact of reforms on the ground. The BRAP 2020 report, for example, was entirely based on multilingual feedback from users at the ground level, providing a more accurate picture of the real-world effectiveness of the reforms.

To further incentivize states to improve their business environment, the central government has linked BRAP performance to borrowing limits. As part of an economic package announced in May 2020, states' borrowing limits were increased based on their BRAP performance, providing additional motivation for states to push for easing regulatory burdens and creating an investor-friendly business environment.

The Business Reforms Action Plan (BRAP) in India has targeted several key areas of regulation to enhance the ease of doing business. The main areas include:

Core Regulatory Areas

  • Labor
  • Environment
  • Taxation
  • Land administration and property transfer
  • Utility permits
  • Inspection
  • Construction

Additional Focus Areas

  • Access to information and transparency
  • Single window system
  • Investment facilitation
  • Public procurement

Sector-Specific Reforms

  • BRAP 2020 introduced reforms across 9 specific sectors:
  • Trade license
  • Healthcare
  • Legal metrology
  • Cinema halls
  • Hospitality
  • Fire NOC (No Objection Certificate)
  • Telecom
  • Movie shooting
  • Tourism
What is the overall cost?

There is currently no information on the cost of implementing BRAP.

How was it implemented?

Launched by the Ministry of Commerce and Industry in 2014-2015, the creation of BRAP was driven by the need to streamline regulatory processes, reduce compliance burdens, and implement digital solutions to make India a preferred global investment hub. The Department for Promotion of Industry and Internal Trade (DPIIT) was tasked with leading this initiative, which aimed to foster competitive federalism among states and create multiple investment hubs nationwide.

BRAP's development involved a systematic approach to identifying and addressing key areas that impact business operations. The plan initially focused on core sectors such as labor, environment, taxes, land administration, utility permits, inspection, and construction. Over time, it expanded to include new areas like ICT adoption and process reengineering through Time and Document Studies (TDS) to ensure faster and more efficient Government-to-Business service delivery.

The creation process of BRAP involved extensive collaboration between central and state governments, as well as engagement with stakeholders from the business community. This collaborative approach ensured that the reforms addressed real-world challenges faced by businesses. The plan was designed to be dynamic, with regular updates and new editions introduced to keep pace with evolving business needs and global best practices.

A key feature in the creation of BRAP was the development of a unique assessment methodology. This methodology evolved over time, moving from an evidence-based system to one that incorporates user feedback. The 2019 iteration, for instance, gave 100% weightage to user feedback, ensuring that the assessment reflected the on-ground reality of reform implementation.

What impact has been measured?

India jumped 79 positions in the World Bank's Doing Business rankings over five years (2014-19), reaching the 63rd position in 2019. 

What lessons can be learned?

Several important lessons can be learned from India's Business Reforms Action Plan (BRAP):

Competitive Federalism

BRAP has successfully fostered healthy competition among states to improve their business environments. This approach of evaluating and ranking states based on reform implementation has driven continuous improvement across the country.

User Feedback is Crucial

The shift to 100% user feedback-based assessment in recent BRAP iterations has provided more accurate insights into the on-ground impact of reforms. This highlights the importance of considering end-user experiences when evaluating policy effectiveness.

Balanced Regulation is Key

BRAP has emphasized the need for appropriate levels of regulation, rather than over- or under-regulation. The goal is to create an environment that protects stakeholders while minimizing unnecessary burdens on businesses.

Comprehensive Reform Approach

BRAP's success stems from its holistic approach, covering multiple regulatory areas like labor, environment, taxes, and land administration. This comprehensive strategy addresses the interconnected nature of business regulations.

Alignment with National Goals

By integrating BRAP with initiatives like Make in India and Reducing Compliance Burden, the government has ensured that state-level reforms contribute to broader national economic objectives.

Continuous Evolution is Necessary

BRAP has evolved over time, incorporating new focus areas and assessment methodologies. This adaptability ensures the initiative remains relevant and effective in addressing emerging business needs.

Incentives Drive Change

Linking BRAP performance to state borrowing limits has provided additional motivation for states to implement reforms, demonstrating the power of financial incentives in driving policy changes.

CURATED BY

Tom Hancock

Research Associate
Global Entrepreneurship Network
United Kingdom