Expediting the progress
Credit to wide-ranging business reforms initiated in recent years, the ease of doing business has undergone remarkable improvement in the country — fostering economic growth and generating employment
It has been encouraging to witness the journey that India has traversed in its business environment over the past decade. Significant efforts have been made to reduce regulatory burden for businesses by way of rationalising compliances and rolling out transparent policies. Reforms, encompassing the entire life cycle of a business, from starting, running and exiting, have been, and are being implemented, resulting in economic growth and employment generation.
That doing business in India is getting easier is endorsed by leading global institutions. According to the ‘Doing Business Report’ of the World Bank, India’s global ranking consistently improved from 142nd in 2015 to 63rd in 2020, and the revamped version, due to be released soon, is likely to show further improvement. The IMD’s World Competitiveness Index 2023 showed India bettering its performance from 71 in 2014 to 40th position in 2023. The World Bank’s Logistics Performance Index 2023 reported India moving to 38th position (out of 139 countries) in 2023, up from 54th rank in 2014. In fact, reducing logistics cost is now a focus area of the government in order to facilitate Indian Industry to compete globally. This is evident by the huge capital budget outlays for the Rail, Road, and Ports sectors.
While it would not be possible to elaborate on an exhaustive list of business reforms introduced in recent years, let me mention ten key initiatives of the Government of India (GoI) that have positively impacted ease of doing business in the country.
First, the Department for Promotion of Industry and Internal Trade (DPIIT), the nodal GoI department for steering business reforms, has guided States since 2014 under the ‘Business Reforms Action Plan’ (BRAP). Based on their performance, States / UTs are
ranked based on different criteria. With a sense of competitive federalism, States have stepped up their initiatives, and progressively introduced policies that support businesses and reduce time for clearances.
Two, the implementation of GST in 2017 paved the way for overhauling indirect tax laws. It led to a significant reduction in transaction costs and simplified procedures for compliance and filing of tax returns. Further, One-Nation-OneTax rate helped remove the disparity of VAT rates applied across States. In a recent development, the government has announced 31 state benches of the GST Appellate Tribunal, which shall help timely resolution of disputes.
Three, DPIIT in 2021 launched the National Single Window System (NSWS), which digitally integrates the requirements of regulatory approvals and renewals from 32 central ministries. The centralised NSWS has several unique features, like Know Your Approvals, availability of a dashboard for checking the status of applications on a real-time basis, and so on. The NSWS is being continuously improved based on feedback from industry. To get the full benefit of this portal, onboarding all states effectively
on NSWS is imperative.
Four, the Insolvency and Bankruptcy Code (IBC) 2016 has transformed India’s insolvency and bankruptcy landscape. IBC has facilitated resolution of a large number of stressed assets, with about 273 companies having been successfully addressed in 2023, up from 160 in 2022, resulting in creditors realising Rs 67,000 crore of dues in 2023, up from Rs 20,860 crore in 2022.
Five, the introduction of the Jan Vishwas Act 2023 has been a great relief to industry as it has decriminalised 183 provisions, which are minor, technical, or procedural, covering 42 central Acts. Substantial decriminalisation has been carried out under the Companies Act too. Besides saving time and cost of legal trials for businesses, decriminalisation shall curb rise of pending cases in the courts and reduce delays in disposal of disputes. As an encouraging sign, the Government has started working on the next version of the Jan Vishwas Act.
Six, enhanced trade facilitation has been a priority of the government, which has resulted in India’s global ranking to improve from 133 in 2015 to 68 in 2020. Reforms have largely been in the area of harmonisation and automation
of procedures for exports and imports. Some of the major initiatives include, introduction of an online Single Window Interface for Facilitating Trade (SWIFT), the revamped Authorised Economic Operator (AEO) programme, the Integrated Risk Management System (RMS), and Direct Port Delivery (DPD) facility. As a consequence, the cost of undertaking both exports as well as imports has been on a decline.
Seven, GoI has introduced the India Industrial Land Bank (IILB), which acts as a repository of all industrial infrastructure-related information such as connectivity and vacant plot-level information. It will provide crucial decision-making information for investors seeking land to set up their facilities.
Eight, significant efforts are underway to streamline environmental rules and regulations, including initiatives like PARIVESH 2.0, the Green Credit Rules, and amendments to key acts such as the Forest Conservation Act, Air Act, Water Act, and Environment Protection Act. They have improved transparency, facilitated business growth, and preserved the environment. PARIVESH 2.0 has enhanced the efficiency of the appraisal process through e-Governance, enabling online submission and monitoring of proposals.
Nine, to address the issue of delayed payments and provide a platform for speedy resolution, GoI has launched the MSME Samadhaan Portal, allowing MSMEs to lodge complaints regarding delayed payments and seek time-bound redressal from the concerned parties. Other key reforms for MSMEs include introduction of Online Registration – Udyam Registration, opening of a dedicated grievance cell and launch of ‘MSME Sambandh Portal’ to monitor the progress of procurement by government enterprises from MSMEs.
Ten, with a view to bring transparency and accountability in enforcement of labour laws, GoI has launched the ‘Shram Suvidha Portal’, which provides for allotment of a Unique Labour Identification Number to all establishments, filing of self-certified returns and a provision for transparent labour inspection.
Needless to say, reforms are an ongoing process and there is always scope for further improvement. We are encouraged by the feedback mechanism that has been institutionalised by way of setting up the “Joint Government-CII Task force on Ease of Doing Business”. The Central Government has been proactively seeking industry suggestions, many of which have been implemented. We must utilise the window of the next 25 years available to us and provide gainful employment to the youth of this country. It is imperative that we maintain this momentum to improve national competitiveness in order to achieve the goal of becoming a developed nation by 2047.
Significant efforts have been made to reduce regulatory burden for businesses by way of rationalising compliances and rolling out transparent policies