New Delhi: With the target of improving India's position among the top 50 countries globally for ease of doing business in next two years, CII has submitted an Action Plan to the Government based on a milestone oriented approach and clear roadmap to help catapult India’s ranking on the parameters measured by the World Bank’s Doing Business Report.
CII accepts the report as an indicative report of progress of World economies including India and is not overly perturbed about the decrease in ranking as the data used is current as of 30 May, 2014 whereas the wave of new policy reforms have cascaded post the date.
“With Government’s reformative drive and resolve, scalable improvement in ease of doing business through the proposed Action Plan will enhance investment attractiveness of the Indian economy and help attain higher GDP growth and spur job creation in a sustainable manner”, said Mr Chandrajit Banerjee, Director General, CII.
The key recommendations in the report for improving ease of doing business in India include:
Rationalization of taxation regime: India needs to adopt policies that mitigate tax disputes, improve tax administration and establish stability and international competitiveness of tax regime.
Facilitating land acquisition process: First priority is to simplify the land acquisition process. There is an urgent need to rationalize the new Act (Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013).
Streamlining investment approval and provision of utilities: Significant time is taken in obtaining basic utilities like water, sewerage and power connections. Projects suffer significant handicap due to poor infrastructure. CII recommends implementing effective single window mechanisms, implementing legislations that ensure time bound government service delivery, and ensuring industrial parks get prior environment and other clearances.
Creating appropriate Labour Development ecosystem: There are 44 labour laws enacted by the Central Government - many which are old and outdated with marginal changes carried out over the years. Due to these, there is heavy compliance burden. There is an urgent need to realign labour laws to new economic needs.
Creating appropriate Skill Development ecosystem: Implementation of National Skills Qualification Framework and National Occupational Standards, Expedite establishing and defining Sector Skill Councils for all sectors, Expansion of apprentice system and modernize apprentice model, and Empower nodal body to define National Skill qualification framework.
Efficient and Effective Enforcement of Laws: E-enablement would facilitate making dispute resolutions quicker and more efficient. Make greater use of technology and e-enable all courts. Enforcing anti-corruption and anti-bribery including protection of Whistle Blowers
Facilitation of greater cross-border transactions: Work towards effective utilization of FTA benefits by helping domestic manufacturing sector to grow and become more competitive, Craft FTA’s such that Indian economy is not disadvantaged, Deepen trade relations with Africa and the Commonwealth of Independent States (CIS) which are the two fastest growing import markets, Deepen Look East policy, Ease export -import related regulations, Resolve port related issues in facilitating trade
Creation of clear Exit guidelines: Exit procedures in India involves multiple and time consuming formalities under various legislations such as Corporate Law, Tax Law, Labour Laws etc. Undertaking the above formalities entails significant compliance costs for the units, and at the same time entails locking of funds and capital assets in non-viable businesses that may be productively employed in other ventures. For easing exit regulations, we are looking at UK Liquidation Process and US Bankruptcy Law.
Technology Enablement across Government: Significant improvement in efficiency, transparency and governance can be brought in by large scale adoption of technology in government. Suggestions include appointing a Chief Technology Officer at the level of Joint Secretary who could be made responsible for technology adoption.
CII has also recently prepared a paper on “Improving Investment Attractiveness: Simplifying Procedures” which analyses the various parameters of the World Bank’s Doing Business report and accordingly makes suggestions to ramp up India’s ranking to within the top 50 in the next 2-3 years. The suggested Action Plan includes what needs to be done, steps to be taken, drivers and timelines, the proposed action Plan has been segregated as immediate (3-6 months), short term (6-12 months), Medium term (12-18 months) and long term (18-36 months).
“CII is pleased to note that many of the recommendations have been acted upon by the Government recently and some have been announced to be implemented in due course of time. With effective implementation of the recommendations in the Reports, we are confident that India could see significant jump in World Bank’s Ease of Doing Business ranking,” added Banerjee.