Ease of doing business ranking: India cites reforms to get top-50 spot

Over the last few years, India has registered a steady improvement in Ease Of Doing Business across indicators

After rising 23 places to attain the rank of 77 in World Bank’s Doing Business Report last year, India is now aiming higher and eyeing a spot in the top-50 list in this year’s report. To that end, it has cited at least 35 new reforms implemented in the last 12 months which have significantly cut cost, time, documentation and procedures for the conduct of business in the country.
 
The reforms include an easier procedure for filing Goods and Services Tax (GST) returns, the elimination of incorporation fees for small businesses, increase in the recovery rate under the Insolvency and Bankruptcy Code 2016, a colour dashboard to track customs clearances in real time, among others.
 

Officials of the Department of Policy for Industry and Internal Trade (DPIIT), the nodal ministry for ‘ease of doing business’ (EODB), along with the Department of Revenue, the Jawaharlal Nehru Port Trust (JNPT), the Ministry of Housing and Urban Affairs and the Municipal Corporation of Delhi met representatives of the World Bank (WB) in May to highlight the architecture of all these new reforms that have led to efficiency and transparency. 
 
“We are expecting a significant improvement in our ranking this year as well. We have shared evidences and supporting data of the wide-ranging reforms undertaken this year. We hope to break into the ‘Under-50’ this year,” a government official said.
 
Over the last few years, India has registered a steady improvement in EODB across indicators. For example, when it comes to ‘Construction Permits’, the country soared 132 places in the last four years, moving up to 52 in 2018.  As for ‘Getting Electricity’, India is now ranked 24 — up from 137 in 2014. In ‘Trading Across Borders’, India came out 80th, compared to 126th in 2014.
 
In Trading Across Borders, the Central Board of Indirect Taxes and Customs  has implemented ICEDASH, an ease of doing business dashboard to monitor daily clearances at each port in real time. The time taken for the clearance of each consignment shows up in classifications of red, amber and green. “This allows customs officers to identify consignments that have taken more time to be cleared and initiate necessary corrective action,” an official said.
 
The customs department has also started a 24x7 facilitation centre at JNPT, which acts as a single window for clearing consignments expeditiously. A drive-through scanner, commissioned recently, scans 100 containers per hour, compared to 8-10 containers per hour done through mobile scanners. This has speeded up the clearance of consignments as containers do not need to be opened, nor truck drivers asked to come out of their vehicles during scanning, the official added.
 
Under ‘Paying Taxes’,  the process of filing GST returns has been simplified and hence made faster. Last year’s World Bank report noted the increase in the time taken to file returns. But now, instead of three returns, a GST taxpayer has to file only two returns. According to government officials, the full impact of GST should get captured in this year's World Bank report. (Since GST was implemented in July 2017, the impact of the tax reform was incorporated on a pro-rata basis in last year’s WB report.)
 
There have been other improvements too. When it comes to ‘Starting a Business’, the Ministry of Corporate Affairs has done away with the incorporation fee for companies with authorised capital of up to Rs 15 lakh.
 
Besides, the department of  revenue has removed the requirement of bank account detail for GST registration, thereby eliminating two procedures under this indicator. In ‘Construction Permits’, there has been a reduction in warehousing costs in Delhi and Mumbai. In Delhi, the building permit fee for warehouses has been reduced from Rs 10 per sq mt to Rs 2 per sq mt.
 
Officials pointed out that a list of 13 reforms carried out in earlier years had not been considered by WB as its impact could not be assessed on the ground.
 
“There are many reforms that were not considered while computing last year’s rankings as there is a lag between decision making and its impact. We are hopeful that those will be considered this year in addition to the new reforms,” a government official said.
 
India has been acknowledged as one of the top 10 performers in ease of doing business over two consecutive years, 2017 and 2018, with an improvement of 53 places — the highest jump by any large country since 2011.