Prescript:
The World Bank which developed the concept of the Ease of Doing Business in 2003 officially discontinued it in 2021 because of major data manipulations. During 2024-2026, the Bank rolled out a redesigned framework, Business Ready (B-READY) which shifts the focus from narrow regulatory checkboxes to evaluating a country’s business environment, balancing the ease of commercial operations with public interest protections like environmental sustainability and labour rights.
Historically placed in the lowest tier of “Emerging Business Ecosystems” in India, J&K climbed rather dramatically to 5th rank in the Ease of Doing Business (EoDB) in 2025. It was designated as a Top Achiever by the Department for Promotion of Industry and Internal Trade at the national Udyog Samagam after scoring top marks in 4 out of 5 critical reform categories. Spurred on by this success, the government introduced the J&K Ease of Doing Business Act, 2026.
The Bill, which was endorsed by industry, trade and commerce bodies, has generated a well-informed debate among diverse stakeholders. Ideally, such a bill should have been put out for formal public consultation instead of taking an internal departmental route with a compressed legislative timetable.
In the context of this debate, it might be useful to spell out that Ease of Doing Business is a horizontal clearance law. It is about reducing the time, cost and uncertainty of complying with rules that already exist; licences, inspections, information demands, timelines for decisions. EoDB sets the procedural floor.
The directional ceiling will, hopefully, be set in the forthcoming Industrial Policy, 2026–35. It will identify priority sectors or activities, offers capital subsidies, tax or GST-linked benefits, interest subvention, land on preferential terms, or infrastructure. The distinction is important because a lot of what is applauded or apprehended from the EODB is neither its remit nor a consequence. Much of the public anxiety and expectation is from the wrong instrument.
The J&K Ease of Doing Business Act, 2026, complies with the Centre’s Deregulation 2.0 push. As a result, the structure of the local economy and the nature of business activity have not shaped the design and contents of the J&K EoDB. Instead of making an EODB relevant for Kashmir’s businesses, the working policy has been plagiarised from the Punjab EoDB Act.
Punjab and Kashmir are chalk and cheese. One is a diversified economy with a broad manufacturing base and excellent market connectivity, and the other is a landlocked services-heavy, driven by horticulture and crafts with a thin micro-scale industrial sector.
In Punjab, what impairs the ease of doing business are classic industrial speed breakers: factory licences, building approvals, inspections and land-use changes. The businesses in Kashmir, on the other hand, faces different binding constraints because most of the value and employment comes from primary production and services. Also, it is the informal household sector and not the estates and park-based enterprises that is driving businesses.
To put it starkly, the EoDB is designed to helps a factory that is waiting on a building or trade licence. It does nothing for an orchardist whose constraint is a truck that has to clear the Banihal axis in time. Not a word about easing exports or negating the cost of being landlocked.
In short, EoDB ought to have followed the actual structure of production, employment and trade of the local economy. Easing business is not only in relation to governmental intervention and interface but also alleviate structural constraints. A region specific EoDB law will still be primarily a process statute, but its definitions, tracks, timelines and supporting provisions will be relevant for the local economy.
Of course, clearance delays matter in Kashmir too. But for a majority of business the unease comes from logistics, seasonal access, and land scarcity. While the EoDB speeds permissions, and sets rules to reduce bureaucratic delays, what it leaves completely unattended is the nature of business, local ownership, size class of business, and ESG. These are relevant and hence sensitive.
For instance, anyone who files a Declaration of Intent is treated the same, whether a Srinagar workshop, a Jammu trader or an outside investor. There is no local-founder preference, no differential land term, no reserved park plots, and no scoring of proposals by local ownership.
The preference for locals in employment that the EoDB has is enabling rather than operative. The Executive Committee may order that every enterprise with more than 10 employees to reserve a percentage of vacancies for domicile candidates. But without fixing any percentage in the Bill. Worse still, units with 10 or fewer workers which is the bulk of J&K establishments are outside even this power. Better to keep the employment-reservation power but make the percentage and the exemption process statutory and uniform and exempt local enterprises below a turnover threshold.
In some instances, like the deemed registration of doctors and third-party certifiers already registered in another state or UT, makes outside professionals easier to use, not local ones. Why?
The idea and intent have to be to give local enterprises concrete process benefits. Local enterprises being ones with majority ownership or control is by domicile individuals, cooperatives or producer companies. For example, priority in the 7- or 10-day tracks when capacity or plots are limited, or a longer inspection moratorium; four years instead of three. There has to be policy signalling.
In addition to ownership, the EoDB simplifications should be stratified by size. Kashmir industry is overwhelmingly micro; it contributes 60 percent of industrial investment and close to 90 percent of industrial employment. The Bill must have size tools. This could include introducing a turnover band, a micro-versus-medium fee, no working-capital or inspection rule scaled to a 2-to-10-person workshop.
Third, a lighter path should be created for a household enterprise as against a park-based plants. The fast lane in the EoDB Act is location: an approved industrial park gets three days; a unit outside waits ten times more! In a place where most units are not in parks, the size structure of the business and the speed structure of the Bill point in different directions.
Fourth, a big fillip could have been given to logistics, which doesn’t even find a mention in the bill. The District Empowered Committee, for instance, could be empowered to have an “access protocol”; priority movement windows, coordination with security forces, traffic and disaster authorities. This will ensure export goods movement (and closures) are managed by rule rather than ad-hoc orders of security forces. The instances of apples rotting on the road because of security forces’ movement are too many to recount.
Finally, environment in the EoDB is a retained constraint, not an incentive. That is deregulation of process, not a green preference. To go green has to be incentivised by fast tracking operational permissions, provide renewable-energy setoffs, give longer moratorium for effluent or energy standards and emissions. These clauses remain inside a process statute: they accelerate and structurally favour the home-grown businesses and land-efficient projects that the local economy needs.
Postscript:
Domain experts have red flagged the EoDB Act enabling executive relaxations to bypass statutory Master Plans which risk environmental vulnerability. Valid as these concerns may be, they demand serious introspection, not shooting the messenger as has been done by the industry bodies.
Despite elaborate master plans, beginning with the Srinagar Master Plan 1971–91 nearly fifty years ago, the city has seen only haphazard growth, illegal colonies, encroachments on government land, and development in flood-prone or ecologically sensitive areas. What gives? Their practical contribution has been marginal because of implementation and enforcement shortfalls. The contention is not to support wanton development but to introspect how master plans should be redone as living, enforceable frameworks that protect Kashmir’s fragile ecology and mitigate disaster risks. Rigid paper blueprints, as the Master plans have been, are meant to be bypassed.
Courtesy: Daily Greater Kashmir