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Ease of Doing Business is the Route to India’s Mission of Self-reliance: CII
Jun 20, 2020

With more outcome-oriented action on Ease of Doing Business, huge momentum to India’s domestic and overseas investment can be imparted at a time when self-reliance is being strengthened, stated the Confederation of Indian Industry in a press release. It outlined 8 areas where strong measures in mission mode can help to boost the economy.

“While many policies have been announced for a facilitative investment climate, effective translation into ground-level outcomes will help investor perceptions and further boost confidence. We believe that taking the ease of doing business route can unlock huge potential at a time when the world is seeking new investment opportunities,” said Mr Chandrajit Banerjee, Director General, CII.

Central and state governments have introduced a plethora of reforms across the various areas of doing business, which have contributed to India’s leap of 79 positions from the 142nd rank (out of 190 economies) in 2014 to the 63rd rank in the latest Doing Business Report of the World Bank. Sustaining this reform momentum can drive new investments including from overseas, stated CII.

CII identified immediate and medium term measures in 8 areas for EODB that can reduce costs and time for making Indian industry competitive.

CII prioritised effective implementation of Online Single Window System as the first step towards strengthening EODB. Regular monitoring by the Chief Secretary of a state, time bound approvals and single interface should be implemented in all states. Currently, only 21 states have implemented this system. For a business entity, there should not be any other point of interface with the government, other than the SWS.

Two, simplifying property registration and acquisition of land is critical. Industry should be permitted to buy land directly from farmers with deemed approval after 30 days. Digitization and integration of land records and single online portal with integrated information can help in titling.

Three, compliances for labour regulations could be speeded up at lower costs. States can follow the example of Uttar Pradesh by exempting industry from select labour laws for 3 years. The applicable limits under Industrial Disputes Act 1947, Factories Act 1948 and Contract Labour (Regulation and Abolition) Act 1970 must be raised immediately by all states, stressed CII.

Four, at a time when India is seeking deeper overseas engagement, it is critical to ensure a quick and low-cost trade facilitation mechanism. The SWIFT system needs to bring on board all Partner Group Agencies. The Risk Management System, Port Community System, and Authorized Economic Operators need to be strengthened, including through automation and digitization.

Five, enforcing contracts is a challenge due to insufficient commercial courts and infrastructure. CII suggests major digital reforms such as virtual court proceedings, e-filing, and work from home to speed up court deliberations. The Alternative Dispute Resolution institutions can be expanded in all parts of the country with arbitration and mediation centres. Over the medium term, judicial capacity must be enhanced with specialized commercial courts at High Courts and District Courts

Six, synchronized joint inspections, computerized risk-based inspections, and differentiated inspection requirements for low-risk industries can reduce the inspection burden on companies, noted CII. Self-certification and third party certification can be extended, as in Telangana where companies with good track record in the medium-risk category are permitted self-certification. In the medium term, an online Central Inspection System for labour, fire, lift, electricity, boilers, etc is required.

Seven, MSME need a special helping hand, according to CII, and should be exempted from approvals and inspections for 3 years under state laws while following all rules. Self certification route can be used for renewal and approvals for MSME with good track record.

Eight, India’s high logistics costs impact its competitiveness. This will require medium term action such as increasing the share of railways and waterways in transport, improving first-mile and last-mile connectivity and reducing port dwell time. Cross subsidization of freight should be rationalised, said CII.

20 June 2020
New Delhi

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