Doing Business And Investing In Odisha –An Investor’s Guide
www.teamorissa.comDoing Business andInvesting in Odisha –An Investor’s GuideA guide and referencework coveringeverything you needto know about doingbusiness in Odisha –from allotment of landto process of renewalof licenses.August 2015
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PrefaceOdisha has always endeavored to provide a hassle-free business environment to investors. A number of reformshave been carried out by the State government towards this end. Although these reforms and the relatednotifications are available in the public domain, a need was felt to compile the details and produce a documentwhich can be referred to by the existing and potential investors. The ease of doing business and the process forsetting up an industry in Odisha, in a step-by-step manner, has been explained in this compendium.The compendium explains the single window clearance system, process of starting an industry in Odisha,clearances/approvals required pre-commencement of an industry, process for renewal of licenses, inspectionprocesses and grievance redressal mechanism. The novel reforms undertaken by the State Government toimprove the investment climate have been highlighted in various sections of this document.The purpose of this compendium is to serve as a guide to investors regarding the processes of registration,approvals, allotments and applications for setting up an industrial establishment in the State. Links to onlinesystems and websites for various services provided by the relevant Departments are also provided. It isanticipated that this document shall work as a guide and reference covering key aspects that an investor needsto know about doing business in Odisha – from allotment of land to process of renewal of licenses.
ContentsA.Odisha: Destination of Choice81.Profile82.Policy Framework82.1. Intent82.2. Infrastructure Development Plan8B.Single Window Clearance System101.Introduction102.Operations of the Single Window System102.1. State Level Nodal Agency102.2. District Level Nodal Agency103.Investment Facilitation Cells114.Process of Approval115.Timelines for Approvals11C.Starting an Industry161.Introduction162.Pre – Establishment Process162.1. Industrial Entrepreneur Memorandum and Entrepreneur’s Memorandum162.2. Preliminary Project Assessment Application162.3. Land Allotment Process172.4. Land Banks, Parcels and Industrial Estates182.5. GIS Enabled Online Portal182.6. Online Combined Application Form (Schedule I A)182.7. Tax Registration192.8. Approvals from the Energy Department202.9. Approvals from Odisha State Pollution Control Board202.10. Approval from Directorate of Factories and Boilers, Odisha212.11. Approval from Labour Department223.Deemed Approval22D.Pre-Commencement of Industry231.Online Combined Application Form (Schedule II)232.Consent to Operate from Odisha State Pollution Control Board232.1. Validity for Consent to Operate233.Registrations under the Directorate of Factories and Boilers23E.Post Commencement of Industry25
1.Renewal of Licenses251.1. Auto-renewal based on Self-certification/ Third Party Certification by Odisha State Pollution ControlBoard (OSPCB)251.2. Renewal of Licenses under Labour Department2.F.Inspection Reforms25252.1. Central Inspection Framework for Industrial Enterprises252.2. Inspection Reforms by Labour & ESI Department262.3. Inspection Reforms by Odisha State Pollution Control Board26Grievance Redressal MechanismAnnexure -1: List of Green Category Industries2829List of FiguresFigure 1: Functioning of Single Window Clearance System in Odisha . 11Figure 2 : Flow chart describing land allotment process . 17Figure 3: CAF Submission and Project Clearance process . 19List of TablesTable 1: Timelines for various approvals. 12Table 2: Fixed Cost Estimate for New Industries seeking Electricity Connection . 20Table 3: Industry Categorization for Non-mining sector projects by State Pollution Control Board . 21Table 4: Industry Categorization for Mining sector Projects by State Pollution Control Board. 21Table 5: Timelines (Number of Days) for Consent for various Category of Industries by State Pollution ControlBoard . 21Table 6: Inspection and Sampling Frequency for various Categories of Industries . 26
AbbreviationsBMCBhubaneswar Municipal CorporationCAFCombined Application FormCoOConsent to OperateCoEConsent to EstablishCSTCentral Sales TaxDICDistrict Industries CenterDIPPDepartment of Industrial Policy and Promotion, Government of IndiaDLNADistrict Level Nodal AgencyDLSWCADistrict Level Single Window Clearance AuthorityEMEntrepreneur’s MemorandumESIEmployee State InsuranceFDIForeign Direct InvestmentGISGeographic Information SystemGoIGovernment of IndiaGoOGovernment of OdishaHLCAHigh Level Clearance AuthorityHLCCHigh Level Clearance CommitteeICTInformation and Communication TechnologyIDCOOdisha Industrial Infrastructure Development CorporationIEMIndustrial Entrepreneur MemorandumIFCInvestment Facilitation CellIPICOLIndustrial Promotion and Investment Corporation of Odisha LimitedIPRIndustrial Policy ResolutionITInformation TechnologyLTLow TensionMAHMajor Accident HazardMROMaintenance, Repair and OperationsMSMEMicro, Small and Medium EnterprisesNIMZNational Investment and Manufacturing ZoneOERCOrissa Electricity Regulation CommissionOIFAOdisha Industries (Facilitation) ActOIFROdisha Industries (Facilitation) RulesORPSAOdisha Right to Public Services ActOSPCBOdisha State Pollution Control BoardPCPIRPetroleum, Chemicals and Petrochemicals Investment RegionR&ARegulation and AbolitionRE&CSRegulation of Employment and Conditions of ServiceSEZSpecial Economic ZoneSIASecretariat of Industrial Assistance
SLNAState Level Nodal AgencySLSWCAState Level Single Window Clearance AuthoritySWCASingle Window Clearance AuthoritySWCSSingle Window Clearance SystemULBUrban Local BodyVATValue Added Tax
Odisha: Destination of ChoiceA.Odisha: Destination of Choice1.ProfileThe modern State of Odisha was created on 1 st April, 1936. With the advent of industrialization, the State hasseen exponential growth in its economy. A stable political and economic climate has further bolstered thegrowth in the State. Odisha has attracted major share of the Foreign Direct Investment (FDI) into India in thepast few years. Bhubaneswar, the capital city, has also been ranked as one of the easiest places to do business inthe country (as per World Bank Report on Ease of Doing Business in India).2.Policy FrameworkThe State Government has recently promulgated the Industrial Policy 2015. The Policy is formulated to create aconducive environment through a regulatory framework to drive sustainable industrial growth in the State.2.1. IntentThe Industrial Policy seeks to promote industrial development in the State to optimally use the existingresource base of the State. The strengths of the State in terms of locational advantages such as long coast line,strong manufacturing base of mother plants, excellent levels of support infrastructure and good governance arethe pillars based on which the Policy has been prepared.The Policy has been formulated to support all forms of enterprises to boost investment and encourage ease ofdoing business in the State. New industrial units, existing industrial units and MSMEs will be eligible forincentives provided in this policy, subject to the conditions stipulated in the Policy.2.2. Infrastructure Development PlanThe Industrial Policy focusses on employment generating industries and industrial infrastructure by providingappropriate incentives and one-time capital grants for infrastructure. The Policy promotes participation of userindustries in the development and management of industrial estates and clusters with a focus on SMEindustries.The Industrial Policy includes provision for quality infrastructure support, development of industrial estates,Special Economic Zones (SEZs), National Investment and Manufacturing Zone (NIMZ), Ports and PCPIR. ThePolicy provides impetus for development of industrial infrastructure through Public Private Partnership modeand development of social infrastructure to support the industrial growth.The focus sectors of the State for next five years are as follows:1.Auto and Auto components2. Downstream and Ancillary Industries3. Agro and Food Processing4. IT and Electronic System Design & Manufacturing5.Tourism6. Manufacturing in Aviation and Maintenance, Repair & Overhaul (MRO) facilitiesDoing Business and Investing in Odisha –An Investor’s Guide8
Odisha: Destination of Choice7.Pharmaceuticals8. Handicrafts and textiles9. Petroleum, Chemicals and Petrochemicals10. Plastics and polymersIn addition to the Industrial Policy, the State has exclusive sector specific policies as below:a) Information & Communications Technology (ICT) Policy, 2014b) Odisha Tourism Policy, 2013c) Odisha MSME Development Policy, 2009d) Odisha Food Processing Policy, 2013Furthermore, the State has recently promulgated a Policy for Special Economic Zones (SEZ) 2015, OdishaFisheries Policy 2015 and a Special Incentive Package Scheme for ESDM sector.Doing Business and Investing in Odisha –An Investor’s Guide9
Odisha: Destination of ChoiceB.Single Window Clearance System1.IntroductionThe State of Odisha is committed to simplify the processes and expedite project approvals. Odisha hasembarked on a mission to leverage technology to complement the governance framework. The approvals andclearances for the establishment and operations of the industries shall be through an on-line portal withminimum human interface. The State is a pioneer in implementing the “Ease of Doing Business” frameworkthrough a robust single window clearance mechanism. In fact, Odisha was one of the first States in India toconstitute a Single Window Clearance System (SWCS) through legislation. This system enables the investor toapproach a single designated authority and seek all clearances and approvals to setup and operationalize anindustry.2.Operations of the Single Window SystemThe State established Single Window Clearance mechanism in pursuance of the Orissa Industries (Facilitation)Act 2004 for providing time bound clearances and approvals. An online Combined Application Form (CAF) hasbeen created which all departments/authorities are mandated to accept for various clearances and approvals.The State has put in place an effective institutional mechanism for industrial promotion and investmentfacilitation at various levels. A three-tier single window clearance mechanism to facilitate speedyimplementation of industrial projects is in place. At the helm, the High Level Clearance Authority (HLCA)chaired by the Chief Minister and State Level Single Window Clearance Authority (SLSWCA) chaired by theChief Secretary provides the overall direction and guidance.Industrial Promotion and Investment Corporation of Odisha Limited (IPICOL) functions as the State LevelNodal Agency (SLNA) and Technical Secretariat for SLSWCA. District Level Single Window ClearanceAuthority (DLSWCA) is active in all the districts. The District Industries Centers (DIC) are effectively taking onthe functions of District Level Nodal Agency (DLNA).IPICOL is also implementing a web-based system to facilitate time bound clearances to investment proposals,including facility for e-filing of Combined Application Form (CAF), e-payment of processing fees and virtualsingle window interface between investors and different clearance authorities. This system is expected to be inplace shortly.The State has also established a GIS based comprehensive Industrial Data Bank for the use of existing andprospective entrepreneurs, administrators and policy makers.2.1. State Level Nodal AgencyIPICOL functions as the single point of contact for all the investors. All the assistance and support that aninvestor might require is provided by IPICOL and the organization acts as an interface between the investorsand the various concerned departments.2.2. District Level Nodal AgencyThe DICs have been identified as the District Level Nodal Agency (DLNA). The function of the DICs is similar tothat of IPICOL, but at the district level. The DLNAs act as the single point of contact and interface for theinvestors at the district level.Doing Business and Investing in Odisha –An Investor’s Guide10
Odisha: Destination of Choice3.Investment Facilitation CellsOne of the key reforms undertaken by the State Government to improve the investment climate is to facilitateand guide the investors proposing to set up industrial units in the State. To strengthen the investor facilitation,the Government has constituted dedicated Investor Facilitation Cells at the State and District levels. TheFacilitation Cell at the State level functions from IPICOL where members from other Departments concerningvarious approvals/clearances have been deployed on full time basis with appropriate delegation of powers.Similar Facilitation Cells have been set up at the district level.The key objective of the Facilitation Cells is to guide the investors, assess the project proposals and follow up fortimely approvals for establishment & operation of the units. The Facilitation Cells aim to provide focusedattention in actualizing the investments on the ground through a “one stop” facilitation process.4.Process of ApprovalThe Single Window Clearance System in the State categorizes the proposed projects into three groups based onthe total investment proposed. An investor with a proposed investment of less than Rs. 50 crore (US 8 million)approaches the respective DIC, which acts as the nodal agency for all further approval and clearance process.The project is considered for clearances by the District Level Single Window Clearance Authority (DLSWA).For projects with investment greater than Rs. 50 Crore (approx.US 8 million), the nodal agency for singlewindow clearance process is IPICOL. All the proposals with proposed investment amount of greater than Rs. 50Crore (approx.US 8 million) are evaluated and assessed by the State Level Single Window Clearance Agency(SLSWCA). However, for projects with proposed investment of greater than Rs. 1,000 crore (approx.US 160million), a special High Level Clearance Agency (HLCA), headed by the Chief Minister, has been constituted forthe clearances.The above mentioned process for the single window system is shown in the flow chart below:Figure 1: Functioning of Single Window Clearance System in OdishaThe maximum time taken for approval of green category projects is 15 days and for other projects is 30 daysfrom the date of submission of completed Common Application Form (CAF).5.Timelines for ApprovalsTo facilitate time bound approvals, time limits for disposal of application of various services by the concernedDepartments have been specified in the Odisha Industries Facilitation Act (OIFA), 2015.Doing Business and Investing in Odisha –An Investor’s Guide11
Odisha: Destination of ChoiceAs per the Act, every concerned Department or Authority is expected to issue the required clearances afterprocessing the application within the pre-defined time limit. In case of failure to issue the required clearanceswithin the specified time limit, such clearances shall be deemed to have been issued and the entrepreneurs mayproceed with the implementation of the projects. This is further explained in Sub-Section ‘3’ of Section ‘C –starting an industry’ of this document.The timelines for various approvals are mentioned in the table below:Table 1: Timelines for various approvalsTime LimitS. No.Service(Working Days)DISCOMs1.Time taken from request for connection to release of connection whereinfrastructure is available152.Time taken from request for connection to release of connection whereinfrastructure is not available30Odisha State Pollution Control Board3.4.5.Consent to Establisha ‘A’ Category after obtaining environmental clearance60b ‘B’ Category after obtaining environmental clearance45c ‘C’ Category30Permission under Hazardous Waste (Handling & Management) Rules30Consent to Operatea ‘A’ Category after obtaining environmental clearance60b ‘B’ Category after obtaining environmental clearance45c ‘C’ Category30Directorate of Factories and Boilers6.Approval of Factory Plan for Non-Hazardous factories307.Approval of Factory Plan for Hazardous factories608.Approval of Factory Plan for Major Accident Hazard (MAH) factories909.Registration and Licensing of Factories30Doing Business and Investing in Odisha –An Investor’s Guide12
Odisha: Destination of ChoiceTime LimitS. No.Service(Working Days)10.Renewal/Amendment/Transfer of factory license3011.Issue of duplicate license3012.Inspection of Boilers & issue of provisional orders to operate boilers1513.Approval of repair order of Boilers1514.Steam pipeline drawing approval3015.Registration of Boilers3016.Endorsement of Certificates of Boiler Operation Engineers, BoilerAttendants and Welders issued by other States1517.Revalidation of Welders’ certificates15Labour Commissioner18.Registration under Odisha Shop and Commercial EstablishmentAct,195619.Renewal of RegistrationEstablishment Act,1956under OdishaShopandCommercial1515Contract Labour(R & A)Act,1970i)Registration (one time)20.15ii)Licenceiii)Renewal (annual)21.Industrial Employment Standing Order Act, 194645UDA/Municipalities22.Building Plan Approval6023.Issuance of Occupancy Certificate (Applicable to BhubaneswarDevelopment Authority and other Development Authorities & ULBs3024.Trade License1525.Water Connection45Doing Business and Investing in Odisha –An Investor’s Guide13
Odisha: Destination of ChoiceTime LimitS. No.Service(Working Days)26.Conversion of Land Use under master plan60Commercial Taxes27.Registration under VAT Act328.Registration under CST Act329.Registration for Profession Tax3Industries Department30.Sanction of incentives under IPR 201530IDCODecision on Land Allotment within IDCO Estates outside BMCArea31.Allotment Letter after receipt of recommendation letter from SingleWindow Authority3032.Execution of Lease Agreement subject to compliance of Terms andconditions of allotment1533.Issue of Possession Certificate15Decision on Land Allotment within IDCO Estates within BMCArea34.35.36.Allotment Letter after receipt of recommendation from HLCCExecution of Lease Agreement subject to compliance of T & CIssue of Possession Certificate301515MSME Department37.Approval of EM-1138.Approval of EM-2239.Sanction of Interest Subsidy, Capital Investment Subsidy and VATReimbursementDoing Business and Investing in Odisha –An Investor’s Guide3014
Odisha: Destination of ChoiceTime LimitS. No.Service(Working Days)Directorate of Fire40.41.42.No Objection CertificateConversion of land use in all other areas (except ULBs)License under Drug and Cosmetics ActDoing Business and Investing in Odisha –An Investor’s Guide30603015
Odisha: Destination of ChoiceC. Starting an Industry1.IntroductionAn interested investor must approach IPICOL/relevant DICs based on the proposed investment amount of theproject. IPICOL or the DICs shall assist the investor through the complete process of establishing andoperationalizing an industry. The following sections explain the process of starting an industry, from allotmentof land and registration of the industry.Pre – Establishm
Doing Business and Investing in Odisha –An Investor’s Guide 10 B.Single Window Clearance System 1. Introduction The State of Odisha is committed to simplify the processes and expedite project approvals. Odisha has embarked on a mission to leverage technology
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