For the first time in its history, India’s achievements in implementing reforms in four of the ten indicators – Trading Across Borders, Getting Electricity, Enforcing Contracts and Paying Taxes – have been recognised by the World Bank’s annual ‘Doing Business 2017’ report that was released on Tuesday.
The Doing Business report – which ranks countries on the basis of Distance to Frontier, an absolute score that measures the gap between India and the global best practice – India’s absolute score improved from 53.93 to 55.27 in the previous year. This is again for the first time that India has improved its absolute score in two consecutive years.
Additionally, India’s Distance to Frontier score improved on six out of the 10 indicators, showing that India is increasingly progressing towards best practice.
On Getting Electricity, the report recognised the efforts of Tata Power in Delhi to make it faster and cheaper to obtain an electricity connection. These efforts, combined with efforts in Mumbai last year, have allowed India to improve its rank on this indicator from 137 in Doing Business 2015 to 26 in this year’s report, a 111 rank improvement.
The report has also recognised the establishment of Commercial Divisions within the High Courts in Delhi and Mumbai to deal with commercial cases above Rs. 1 crore. This has allowed India to improve its rank by 14 places in two years.
In the area of Trading Across Borders, the report recognised the implementation of the Single Window Interface for Trade (ICEGATE), which integrates approvals and risk-based frameworks of customs and nine departments to provide traders with a single online interface for import clearances.
On Paying Taxes, the report recognised online filing and payment of returns at the Employee’s Social Insurance Corporation.
The World Bank acknowledges only such reforms which have been implemented in Mumbai and Delhi by June 1 each year; if they are reported as implemented by business intermediaries.
The Government of India says there are some major reforms that have not been accounted for in current year’s report such as enactment of the Insolvency and Bankruptcy Code, the constitutional amendment to enact a Goods and Services Tax, introduction of online single window systems for building plan approval in Delhi and Mumbai, introduction and streamlining of INC-29 for company incorporation, the elimination of the requirement of a company seal while applying for government registrations and permissions at the time of setting up of a business, online registration for ESIC and EPFO registration, online filing and payment of returns at the Employee’s Provident Fund Organisation, streamlining of name reservation process at Ministry of Corporate Affairs among other.
The Union Ministry of Commerce and Industries said over the past two years, the Government has implemented a host of reforms to make it easier for businesses to start, operate and exit. It is therefore disappointing that these achievements are not covered by the report due to methodological issues.
The Government, however, said it remains committed to its goal of achieving among the top 50 rank in the report in the coming years, while action is already being taken to implement further reforms with an eye on next year’s report, including among others implementing the Insolvency and Bankruptcy Code by notifying regulations and institutionalising proceedings at the National Company Law Tribunals; implementing GST nationwide by April 1, 2017; implementing a single form for company incorporation, name availability and director’s identification number and making it mandatory; and merging registries of charges at MCA and CERSAI into a single registry to build a unified online data base of security interests over movable assets.
Besides, the Government has asked also departments involved in implementing reforms to appoint observers to regularly seek feedback from business on implemented reforms to ensure that the reforms are being felt. The observers will play a critical role in ensuring that reforms are functioning as intended and that any roadblocks along the way are being addressed in a timely manner.
Besides, the Department of Industrial Policy and Promotion (DIPP) will appoint external agencies as well to supplement these activities and to help departments carry forward reforms, hold stakeholder consultations, and monitor implementation of reforms.