oppn parties India Improves in Ease Of Doing Business, But Is It Enough?

News Snippets

  • The government decides to decriminalize more than two-thirds of penal sections in the Companies Act
  • Muslim groups tell the Supreme Court that they want the Babri Masjid to be restored
  • Muslim groups claim that while they were asked questions in court, Hindus were not questioned
  • Postpaid mobile services restored in Jammu & Kashmir from today, but still no internet
  • Abhijit Banerjee, an Indian-American currently a professor at MIT, wins the 2019 Noble prize in economics jointly with two others
  • Industrial output slumps in August as the IIP shrinks by 1.1%
  • Prime Minister Modi and Chinese President Xi Jinping watch a cultural show at the Shore Temple in Mamallapuram
  • J&K administration lifts the ban on entry of tourists in the Valley, but it remains doubtful how many will visit without being able to use mobile phones and internet
  • After Sena asks members to support the BJP candidate in Kalyan, 26 party corporators and 300 members resign setting off a crisis
  • The Centre sets up a 12-member committee to suggest systemic changes in the GST structure to improve compliance and collection, prevent misuse and evasion and rationalize rates and slabs
  • In line with the RBI outlook on the Indian economy, rating firm Moody's also downgrades growth forecast from 6.8% to 5.8% this year, saying the economy is experiencing a pronounced slowdown
  • HDFC chairman Deepak Parekh says the financial system in India does not offer foolproof security for misuse of the savings of the common man
  • Shivinder Singh and Malvinder Singh, promoters of Ranbaxy and Fortis, arrested for their role in Religare Finvest scam
  • Supreme Court says marriage can be dissolved if it has broken down irretrievably
  • DA of Central government staff hiked by 5% to 17%
Sourav Ganguly is the new president of BCCI, says conflict of interest is a big concern
oppn parties
India Improves in Ease Of Doing Business, But Is It Enough?

By Ashwini Agarwal

In advance information before the Ease of Doing Business Index is published in October, the World Bank has indicated that India is among the top 20 most improved nations list. The bank has indicated that India has improved the most in four areas that count in the final rankings - starting a business, resolving insolvency, trading across borders and construction permits.

India was ranked 77 in the 2018 list. But it stood at 137 in starting a business, at 52 in construction permits, at 80 in trading across borders and at 108 in resolving insolvency. It is clear that the policies of the government regarding the GST, the Insolvency and Bankruptcy Code and the changes to the Companies Act have contributed to the improvement.

But if one goes through the ranking parameters, it is obvious that India still needs to do a lot to improve three major hindrances to business - registering property (166), paying taxes (121) and enforcing contracts (163).

Let us first take up the problem of enforcing contracts. The legal system in India is plagued with delays and it takes ages to get a verdict. Although there was the talk of commercial courts speeding up the process, not much has been heard of them since. This is one area where India has to improve a lot if it wishes to attract FDI. Commercial courts must be set up fast and the arbitration process must be strengthened to resolve commercial disputes.

Registering property is related to land reforms and easy conversion of land is not always available to those wishing to set up industries. Although land is a state matter, reforms are overdue and it seems that there is no political will in tackling this sensitive matter.

When the final list comes out, Indian might move up by 5 to 10 ranks. There will be a celebration in New Delhi. But the fact remains that for an economy aspiring to be the best in the world, a rank of 65 or 70 is shameful. We must be right up there in the top 10. The government must work to cut the red tape and make doing business easy.