Tough business

Written by Saikat Neogi | Updated: May 23 2014, 02:19am hrs
Nine out of ten top company executives feel that Indian tax authorities are not proactive in promoting investments, and direct tax regime in the country is not conducive to fostering growth. Majority of respondents in a survey jointly carried out by consultancy firm KPMG and industry body CII said that the neutralisation of the tax ruling by the Supreme Court in the Vodafone case through a retrospective amendment had a damaging effect on investment sentiments.

While India is one of the fastest growing economies in the world, the World Bank last year ranked the country 134 out of 189 nations in the overall ease of doing business. India ranks low on most of the determinants of investment attractiveness such as starting a business, enforcing contracts, dealing with construction permits and paying taxes. The same sentiments were reiterated in the KPMG-CII survey where respondents said that average time taken to acquire land is 14 months and can be more in some cases. About 50% of respondents have highlighted major challenges in obtaining environmental clearances.

Taxation is a major challenge for companies. While the share of service tax in the overall tax receipts is growing, over half of the respondents face delays in getting service tax refunds. Simplifying complex tax processes and reducing the time taken for availing incentives will boost business sentiments. Respondents feel the implementation of DTC, GST and an independent grievances cell will go a long way in promoting a conducive business environment in India.