Thrust continues on ease of doing business reforms

By: |
Published: May 18, 2020 9:59:38 AM

Finance minister Nirmala Sitharaman on Sunday, while announcing the fifth tranche of economic stimulus, spoke about government’s thrust on enhancing the ease of doing business and making efforts to increase India’s doing business report (DBR) ranking.

business reforms, ease of doing business, Nirmala Sitharaman,DBR ranking, Companies (Amendment) Bill,NCLTompany law violations involving minor technical and procedural defaults to be decriminalised.

The government has decriminalised various provisions in the Company’s Act and streamlined various other regulations, but auditors and corporate law professionals sought more clarity on some of these changes.

Finance minister Nirmala Sitharaman on Sunday, while announcing the fifth tranche of economic stimulus, spoke about government’s thrust on enhancing the ease of doing business and making efforts to increase India’s doing business report (DBR) ranking.

Amendments were earlier introduced in the Lok Sabha under the Companies (Amendment) Bill, 2020, wherein it was proposed to re-categorise 23 offences out of 66 compoundable offences. Company law violations involving minor technical and procedural defaults to be decriminalised. Shifting majority of compoundable offences to the internal adjudication mechanism has also been proposed.

The finance minister informed that government is working on a mission mode for the next phase of ease of doing business reforms relating to easy registration of property, fast disposal of commercial disputes and simpler tax regime for making India one of the easiest places to do business.

Nangia Andersen director Sandeep Jhunjhunwala said, “Decriminalisation of compoundable offences which are technical or procedural in nature and which otherwise do not involve larger public interest, would definitely prove cost-effective as well as time-efficient for corporates.”

Corporate law professionals welcomed government measures for streamlining regulations and doing away with unnecessary rules, but many said several initiatives announced by the government need further revision.

AMRG & Associates CEO Gaurav Mohan said, “Even though the government is announcing measures for bringing in ease of doing business, the measures are deficient in addressing inherent issues.”

For instance, every new company has to now fill in Form SPICe+ for incorporation and incidental registrations effective February 2020. But soon after its inception, users of this utility are facing issues ranging from difficulty in downloading forms to prior association of DSC with PAN, he explained.

“Main idea behind this utility was to lessen hassles for businesses and professionals, but such teething issues pose a
serious difficulty for its optimum usage for the end users,” Mohan added.

Dipti Lavya Swain, a corporate M&A lawyer and partner at HSA Advocates, said: “In the government’s continued attempt, decriminalisation of various minor defaults and effectualisation of an internal adjudication mechanism will be much welcome, but at the same time, the process should be more objective and digitally facilitised”.

Dolphy D’Souza, a partner at auditor SRBC and Co, pointed out, “It will project the country as a more mature economy. An internal mechanism for compounding offences will de-clog criminal courts and NCLT, who are currently over-burdened…”

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Building rural economy key to halt mirgration: Nobel laureate Muhammad Yunus
2Atmanirbhar Bharat not about import substitution; here’s what the Modi’s self-reliant India means
3Ordinances on inter-state farm trade, contract farming out of judicial process