In May, Nirmala Sitharaman, the then Commerce and Industry Minister said that the government has taken over 7,000 small and big steps to improve the ease of doing business in the country. As World Bank is set to release its 2018 Ease of Doing Business ranking today, India has pinned high hopes on it — jumping 30 ranks to break into top 100, especially after a disappointing performance last year.
Besides two biggest reforms, implementation of the Goods and Services Tax and the Insolvency and Bankruptcy Code, here are some of the major reforms undertaken by the government to ensure ease of doing business in India — from speeding up the process to abolishing red-tapism.
1. The government has announced investor-centric hub-and-spoke based online single window model for providing clearances and filing compliances.
2. The government launched another online portal ShramSuvidha for firms to file a common return on its portal to comply with as many as eight labour laws at one go.
3. The government has also targeted to reduce the number of days required to set up a business in India to four.
4. The government has also done away with the requirement of the affidavit from the applicants of the defence industry. A maximum timeline of 12 weeks has been finalised by the Ministry of Home Affairs for grant of security clearance on industrial licence applications.
5. The insurance reform bill has been passed in Parliament which allows more Foreign Direct Investment in the sector.
6. The government allowed 39 exemptions for private companies licensed to set up businesses under international financial services centres (IFSC) such as allowing them to make investments through more than two investment companies. The government also waived transaction taxes and stamp duty for IFSCs.
7. The government has set up National Investment and Infrastructure Fund (NIIF) with the aim to attract investments from both domestic and international sources for infrastructure development in commercially viable projects. The corpus of the NIIF is proposed to be Rs 40,000 crore ($6 billion) wherein the government will invest 49%.
8. In a bid to reduce red-tapism, the government abolished the Foreign Investment Promotion Board (FIPB) which used to scrutinise foreign investment proposals. The proposals are now cleared by departments concerned.
India’s ranking in the ease of doing business is crucial for the Narendra Modi government as the Prime Minister had been pitching the country as an ideal place for businesses with initiatives like ‘Make In India” and “minimum government, maximum governance”. The World Bank reportedly took under consideration reforms claimed by India. The ease of doing business is an index created by the World Bank to measure regulations directly affecting businesses and overall environment such as market situations, infrastructure, inflation, crime et al. New Zealand, Singapore and Denmark were the top three countries in the last report.
(First published on October 30, 2017, on www.financialexpress.com)