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

News Snippets

  • Flipkart assures employees that there will be no job or salary cuts due to the COVID-19 pandemic
  • Although it was obvious, but the government still clarifies that there is no need to switch off appliances and only lights need to be switched off on April 5 at 9pm after confusion in the minds of some people
  • PM Modi and President Trump decide "to deploy full strength of (Indo-US) partnership" to fight against COVID-19
  • 17 states have reported 1023 cases of coronavirus linked to the Tablighi Jamaat, which translates to 30% of all positive cases in India
  • The government says people should not use alcohol-based hand sanitizers before lighting diyas or candles on April 5
  • The railways say there is no certainty yet when services will resume after the lockdown and a final decision will be taken in the next few days
  • As coronavirus cases multiply in Assam, six north-east states seal their borders with the state
  • Power System Operation Corporation Ltd. (POCOSO) putting all systems and protocols in place at war-footing to ensure there is no grid failure due to reduction in demand on April 5 at 9 pm
  • Power ministry scotches rumours that the power grid might fail due to the 9-minute blackout called by PM Modi on Sunday, April 5
  • Centre asks people to wear home-made masks if it is absolutely essential for them to step out of homes
  • Centre asks states to allow licensed street vendors to sell essential items
  • 8000 samples were tested across India on April 2, but the government said that testing will be need-based and will not be used as a confidence-boosting measure
  • Air India operating special flights to fly passengers stuck in India since the lockdown
  • For the first time in history, Darjeeling loses first flush tea due to suspension of garden work for Covid-19 outbreak
  • Supreme Court asks journalists to be responsible and publish only the official version of news after it was brought to its notice that migrant exodus started after the 'fake' news that the lockdown will be extended to three months
Total count stands ar 3082 as India records 16 Covid-19 deaths, the highest in a single day
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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.