As per the “Doing Business 2018” report, India has just climbed a historic 30 spots on the World Bank’s “Ease of Doing Business” ranking. This is the biggest ever jump for India and also the highest for any country this year. From 130 in the previous installment of the Doing Business 2017, India has jumped to rank 100.
This historic rise comes on the back of sustained reforms and the period of reference for the Doing Business 2018 report, interestingly, also encompasses the period during which demonetization happened.
Factors in the Ease of Doing Business Ranking:-
- Starting a business
- Dealing with construction permits
- Getting electricity
- Registering property
- Getting credit
- Protecting minority investors
- Paying taxes
- Trading across borders
- Enforcing contracts
- Resolving insolvency
- Labour market regulation
Some key reforms that may have impacted the ranking surge have been mentioned below.
Ease of Starting a Business:
Doing away with the minimum capital requirement for incorporation, extending the period of validity of industrial licences from two years to three years with provision for further extension, scrapping the requirement to obtain a certificate to commence business operation, and other similar steps, have all boosted the ease of starting as well as continuing a business.
Insolvency and Bankruptcy Code:
The Insolvency and Bankruptcy Code is one of the biggest reforms in boosting the “Ease of Doing Business”.
The Shram Suvidha portal brings to the table a single platform for compliance of multiple labour laws and requirements. Since the portal is online, it improves transparency and ease of compliance. Further, labour inspections are being guided by a digital system that sifts through data and objective criteria, thus reducing the scope for random inspectors swooping on companies.
The eBiz portal enables transparent and easy government to business interaction. Reducing delays in regulatory processes, it keeps all stakeholders informed and on one single platform for a range of activities, ranging from the start of a business to its operations and even closure.
The Customs Electronic Commerce Interchange Gateway portal has brought multiple documentary compliance processes online on a single platform. This has greatly improved both ease of compliance as well as saved time for the stakeholders involved.
Ease of Getting Electricity
A focused push for reforms – both regulatory and administrative — saw India’s power sector improve its health dramatically. India’s ranking in the Ease of Getting Power dramatically jumped from 99 in 2015 to 26 in 2017.
Further, there have been many more reforms like the
dissolution of the FIPB,
easing of FDI norms in various sectors as well as increasing the FDI cap across many sectors,
reduction of documents needed for import-export trade,
multiple regulatory relaxations to start-ups,
streamlining of environmental approval mechanisms through mandatory online processing and, lately,
the Goods and Services Tax.
India’s historic jump of 30 spots in the Ease of Doing Business rankings seems to be only a beginning towards a much more enterprise-friendly environment.