Ease of doing business is an index of the ranking system of the world bank. Simeon Djankov, Michael Klein, and Caralee McLiesh, three leading economists at the World Bank Group, have created the concept of ease of doing business. It started in 2003. Here, depending on information from 12 areas of business regulation the ranking of 190 counties:
- Starting a Business of all
- Dealing with Construction Permits
- Getting Electricity
- Registering Property
- Getting Credit
- Protecting Minority Investors
- Paying Taxes
- Trading across Borders
- Enforcing Contracts
- Resolving Insolvency
- Employing workers
- Contracting with the government
Thus, a high ranking of a country in the index of ease of ranking business indicates that the regulatory environment is more conducive for starting and operating businesses in that country and vice-versa.
Ease of doing business in India
Recently, India has ranked 63rd in the ease of doing business index ranking report of world bank, 2020. Accordingly, to improve the ranking in the index India has been launching schemes since 2014 and it helps to improve India’s ranking from 142nd in 2014 to 63rd in 2020. Hence, some of the initiates of Government of India in this regard are-
A) Starting a Business (Ease of doing business)
- Merger of permanent Account Number (PAN), Tax Deduction & Collection Account Number (TAN), Director Identification Number (DIN) into a single form (SPICe) for company incorporation.
- Elimination of incorporation fee for companies with an authorised capital of up to Rs. 15 Lakh.
- Simplification of five-page form and other attachments for reserving the name of the Company with the Ministry of Corporate Affairs into a simple web service with only three fields to be filled.
- Registration under Employee State Insurance Corporation (ESIC) and Employee Provident Fund Organisation (EPFO) is available at Shram Suvidha portal as a common online service with no physical touch point.
- Further, no requirement of inspection before registration under the Shops & Establishment Act in Mumbai and Delhi.
- Amendment of Companies Act to eliminate the requirement of a common company seal.
B) Dealing with Construction Permits (ease of doing business)
- Firstly, municipal Corporations of Delhi, as well as Municipal Corporation of Greater Mumbai, have introduced fast track approval system for issuing building permits with features such as Common Application Form (CAF), provision of using digital signature and online scrutiny of building plans.
- Secondly, Delhi has uniform building by-laws which allow for risk-based classification regimes for different building types. It has a provision of deemed approval of sanctioning building plans within 30 days.
- Further, for construction permits, the time reduced from 128.5 to 98 days in Mumbai and from 157.5 to 113.5 days in Delhi between Doing Business 2018 and 2020 reports.13
- Moreover, the total number of procedures reduced to 19 in Mumbai and 11 in Delhi.
- Finally, cost of obtaining construction permits reduced from 23.2% to 5.4% of the economy’s per capita income.
C) Trading Across Borders
- Firstly, the Central Board of Excise and Customs (CBEC) has implemented the ‘Indian Customs Single Window Project’ to facilitate trade. Importers and exporters can electronically lodge their Customs clearance documents at a single point. The government has launched ‘PCS1x’ which intends to integrate 27 maritime stakeholders at one platform.
- Secondly, requirement of the number of mandatory documents for customs purposes, for both import and export of goods, has been reduced to three.
- Furthermore, e-Sanchit, an online application system, allows traders to file all documents electronically.
- Moreover, the electronic self-sealing of the container at the factory has reduced time and cost for exporting firms.
- Again a computerized risk management system has brought transparency and reduced the frequency of custom inspections significantly.
- Finally, central Board of Indirect Taxes and Customs has provided a facility for Advance Bill of Entry (Advance Import Declaration)
D) Enforcing Contracts
- Firstly, establishment of the Commercial Courts and Appellate Division of High Courts in Mumbai and Delhi.
- Secondly, National Judicial Data Grid (NJDG), provides case data including case registration, cause list, case status and orders/ judgements of courts district-wise across the country. NJDG has been open to the public since 2015.
- Furthermore, assignment of new cases randomly in district courts randomly through an automated system in Delhi and Mumbai.
- Again, introduction of e-filing of cases in district courts of Delhi and Mumbai.
- Finally, development of case management tool with the functionality of sending a notification to lawyers, viewing court orders/ judgements, tracking the status of cases, semi-automatically generating court orders etc.
E) Getting Credit
- Central Registry of Securitization Asset Reconstruction and Security Interest (CERSAI) is a geographically unified electronic registry that provides for registration by asset type. Since 2017, CERSAI also provides search through debtor’s name.
- Amendment of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) (Central Registry) Rules, 2011 to include additional types of charges, including a security interest in – immovable property by the mortgage, hypothecation of plant and machinery, stocks, debt including book debt or receivables, intangible assets, patent, copyright, trademark, under-construction building.
- The definition of property, which now includes immovable as well as intangible, allows CERSAI to register these additional charges.
F) Getting Electricity
Reduction of the total number of procedures to 3 in Delhi and 4 in Mumbai.
Provides electricity connection within 7 days if no Right of Way (RoW) is required and within 15 days where RoW is required.
Service line cum Development charges are now capped at USD 339.84 in Delhi.
Requirement of the number of documents for getting an electricity connection has been reduced to tow and no physical documents are accepted.
