The World Bank’s annual ranking for ease of doing business brought a joy to the Indian Government when India was recognized to be amongst the top 100 countries. It is a marked elevation as compared to the past records and depicts the endeavors of the authorities to ensure the promotion of India as a business amicable nation. To enter onto the league of the 100 best nations facilitating the easier conduct of business, the Government conceptualized and devised strategies focused on boosting the business viability in India.
Analyzing several aspects of business operations, the World Bank appreciated the progress India has made by channelizing and reforming their existing polices, to name a few:
1. Company Incorporation
The cumbersome procedure for incorporation of the company is being replaced with Simplified Performa for Incorporating Company Electronically (SPICE e) for reservation of Company name and introduction of one-time passwords as an alternative to the digital signature.
The reduction in the cost of transportation of goods not only for import/ export purposes but also within the territory of India has resulted in benefits to the entities to conduct their business in a more profitable manner.
3. Insolvency Cases
The conducive and efficacious implementation of the Insolvency and Bankruptcy Code, 2016, has resulted in the settlement of the insolvency disputes in a time bound manner. Instilling confidence in the creditors, it is a comprehensive, systemic and speedy reform which paves way for development and progress. It has reposed the faith in the judicious approach of the legislature inculcating protection against unscrupulous debtors escaping and delaying the repayment of debts incurred by using the legislative framework thereby preventing taking advantage of one’s own wrong.
4. Business Regulation
The pragmatic approach of the Government of India towards a shift to the best business practices has been advantageous to the country in the easing of carrying on business activities. India has been classified as one of the top 5 best performing nations globally in reforming the business environment.
5. Access to Credit
Owing to the implementation of the new Insolvency and Bankruptcy Code, 2016, with respect to the time limit and grounds for relief, the accessibility to credit to the business entities has become easy.
6. Minority Investors
The interests of the minority have been protected by strengthening of the redressal mechanisms and remedies in case of prejudicial transactions.
7. Tax Payment
The Indian Government is working towards the development of a more fair, judicious and stable system of taxation. Efforts are being made to rely on electronic taxation process to shorten and un-complicate the procedure involved therein.
8. Electricity Connection
The Government has proposed the power authorities to lower the cost of obtaining a new electricity connection to 25% of per capita income or INR 28,000.
Miles to go before sleep
Although, India has shown a shift towards development of its standards which are beneficial for the business prospects to attract investment, yet there remains a long path to be covered to be the best in the field. In the said process, there persist numerous challenges to be met, some of which are listed as follows:
1. Construction Permits
The burdensome and time involving procedures to obtain construction permits deters the business entities to consider India for their business purposes.
2. Enforcement of contracts
The usual time for enforcement expands over a span of 3-4 years whereas there are nations where such time frame extends to a period of 6 months. It is essential that the elongated time taken for the enforcement of contracts through a judicial mechanism be substituted with more time restricted expedite processes such as Alternate Dispute Resolutions mechanism and fast track Courts.
3. Commencement of Business
Despite measures like combining of the application for Permanent Account Number (PAN) and Tax Account Number (TAN) in one application to ease the commencement of business in India, there still persists a requirement to condense and organize the procedures for commencement of business and formulate a less time consuming process for the same.
4. Registration of Property
Owing to varied legal hurdles attributable to availability and disputed titles obstruct the acquisition of land in India, hinder the time efficient resolution of registration of property thereby affects the ease to do business.
5. Cross Border Trading
Although, there has been reduction in the cost of Import Export border compliance accountable to the availability of online platforms, more dedication is prescribed to ensure better trade management through India.
The current scheme of ranking the countries on the ease they provide in doing business, India has been adjudged as per the business nature available in Delhi and Mumbai only. In the longer run, it is necessary for India to consider its business environment for the country all together and not be limited to the two cites stated above. Decentralization of business hubs can help achieve the overall development of the nation on the economic front in terms of generation of employment and availability of resources in different areas as a whole making India a business friendly and promoting country.
7. E-commerce regulations
India is considering drafting of a comprehensive national e-commerce policy to develop an ecosystem that would cater to the needs and interests of the business entities in terms of online systems for fulfilling legal requirements with substantial ease.
Even as the ‘ease to do business’ ranking index is encouraging, there still remain milestones to achieve so as to exist in the ever growing and ever improving market of different nations. The World Bank has through its parameters indicated the scope of betterment which should act as a motivation for the government to be on their toes to strive hard in order to make India one of the first choices of the business undertakings.