The World Bank’s Doing Business project provides objective measures of business regulations and their enforcement across 190 economies. This year, the study places India on the 100th spot which is 30 places up from the last year ranking.
According to the Doing Business Report, this appraisal is the result of the following key reforms initiated by the Modi led government:
- Merging the Permanent Account Number (PAN) and the Tax Account Number (TAN):
India started making business faster by combining the applications for the PAN and the TAN, and by enhancing the online application system. The report also states that Mumbai expediates the process of doing business by merging the applications for the value-added tax and the profession tax.
- Reinforced access to credit:
Amending the rules on the priority of secured creditors outside reorganization proceedings, strengthened the access to credits.
- Introduction of new insolvency and bankruptcy code:
India made resolving insolvency simpler by adopting a new insolvency and bankruptcy code that introduces reorganization procedure for corporate debtors and facilitates the continuation of the debtor’s business during insolvency proceedings. The step also provides a time limit and clear grounds for relief to the automatic stay for secured creditors during reorganization proceedings. Thus, simplifying the access to credit.
- Introduction of the National Judicial Data Grid:
India made enforcing contracts more accessible by introducing the National Judicial Data Grid, which makes it possible to generate case measurement reports on local courts.
- Electronic EPF payment:
India made paying taxes easier by making payment of EPF mandatory electronically and offering a set of administrative measures easing compliance with corporate income tax.
- Protecting Minority Investors:
India strengthened minority investor protections by increasing the remedies available in cases of prejudicial transactions between interested parties.
Sonal Arora, Vice President at TeamLease Services shares with People Matters that the ranking will further improve next year with the GST execution; which had happened post the current ranking assessment period.”
She also adds, “Another aspect that can improve the ranking and positively impact the ease of doing business would be easing off the approvals and permissions required while starting a business. Currently, 10-12 registrations including labor compliance related registrations are required for starting a business. Further, as an organization grows or expands, it is required to avail additional registrations or approvals which are required separately for each additional office. These need to be reduced. Further, the process needs to be simplified and standardized across the country, this will both improve our ranking in terms of ease of doing business as well encourage companies to increase their geographical footprint and take jobs to people.”
The World Bank also reported that while there has been substantial progress, India still lags in areas such as starting a business, enforcing contracts and dealing with construction permits.