From rapidly changing policy to delay in payments, there are several issues still existing in the economy which have kept the industry on one foot.
Though India has made a substantial leap in the Ease of Doing Business rankings, there are areas where India needs more reforms to include itself in the top 50 by next year. The government had earlier set a target of bringing its rank below 50 by 2020. The World Bank report shows that in the field of getting electricity, registering property, getting credit, protecting minority investors, paying taxes, and enforcing contracts, India still needs reforms to make it easier to do business. From rapidly changing policy to delay in payments, there are several issues still existing in the economy which have kept the industry on one foot. Even Finance Minister Nirmala Sitharaman has critically acknowledged the Doing Business 2020 report by showing disappointment about the ‘Starting Business’ parameter, which improved by only one rank this year.
“There are many areas where a nationwide reform is needed. One of the major problems in India is that the policy keeps on changing and fluctuating. The power purchase agreement policy has been changed in some cases. Now, if the sovereign contract will keep on changing, where else would the investors’ trust,” Sushil Sarawgi, Managing Director, KOR Energy India, told Financial Express Online.
Being a very competitive market, the return on investment is also doubtful in India, and issues like difficulty in land acquisition and delay in payment to the distribution companies still exist, he added.
However, after India’s overall rank jumped 14 spots to 63, the industry is hopeful for further improvements which will take India in the list of top 50 nations with the maximum ease of doing business by next year. Standardisation, simplification, and speed are the three areas that are needed and digitisation can make them possible, says Anand Mahindra, Chairman, Mahindra Group.
And a top 50 ranking is within striking distance. We’re like long distance runners who now need to accelerate & break away from the pack running with us. Need a 3S push: Standardization, Simplification & Speed… Digitisation will enable all three… @narendramodi @nsitharaman https://t.co/OxxWrYRyq9
— anand mahindra (@anandmahindra) October 24, 2019
The industry bodies are also hopeful that they will get better policy directions in some crucial areas in the coming time. “The improvement in ranking confirms an independent assessment of the progress made by the country in many of the eleven areas covered under this ranking. At the same time, entrepreneurs in India are looking for better visibility of policy directions in crucial areas such as e-Commerce, data protection, electric vehicles, etc., Anurag Saxena, Global Head – Strategic Initiatives, MicroSave Consulting (MSC).
The industry voices also speak against the stringent labour laws that act as a major hurdle in boosting productivity. “The Government should focus on the reforms in land acquisition, implementation of fixed-term employment in all the states and decriminalisation of businesses as stringent labour laws are a major roadblock to enhance production possibility frontiers and employment generation in the economy, Dr D K Aggarwal, President, PHD Chamber of Commerce and Industry in a press statement issued today.