CII says there are major ground-level changes in Investment Climate
By TIOL News Service
NEW DELHI, OCT 26, 2016: "ON the ground, there have been significant changes in Ease of Doing Business which are insufficiently captured in the latest World Bank Doing Business rankings. The Government has made much effort to improve the investment climate through a range of measures, including small enterprises, labour regulations, environmental clearances, and company registrations, among others," said Dr Naushad Forbes, President, Confederation of Indian Industry (CII), in a press release issued today. He was commenting on the release of the World Bank Doing Business Report 2017 which placed India at 130 rank, one slot higher than the revised rank for 2016.
"This year's Doing Business report takes into account the position as of June 1, and therefore does not include crucial changes such as GST and the Insolvency and Bankruptcy Code which are taking effect later," noted Dr Forbes.
"The Doing Business report recognizes India's reforms in key parameters, but measures the investment climate only in Delhi and Mumbai. Many reforms that have taken place with the monitoring of DIPP at the state level are not considered and do not reflect in the countrywise ranking," pointed out Dr Naushad Forbes.
"CII has been working closely with all stakeholders including the World Bank, DIPP, and state governments as also industry to identify and resolve roadblocks to Ease of Doing Business. We find that the situation has significantly improved and we appreciate DIPP's constant focus on improving the investment climate," added Dr Forbes.
The World Bank Doing Business 2017 report includes reform policies completed by June 1, 2016. Further, it considers the investment climate and procedures implemented in two cities of Mumbai and Delhi. As such, most of the progress taking place across the state governments is not incorporated in the Report.
The Central Government has undertaken major policies in areas pertaining to legislation, which will translate into outcomes shortly. The progress on the Goods and Services Tax (GST) is an outstanding example of Center-State coordination and the introduction of the tax next year will transform the business environment and add to growth rates. Besides, the Insolvency and Bankruptcy Code will enable businesses to exit smoothly, said CII in its release.
Noting the pace of reforms under DIPP's Ease of Doing Business mission, CII added that online administrative processes have been introduced rapidly. The Single Window Interface for Trade (SWIFT) provides approvals and integrates nine departments for facilitation of imports. INC-29 merges getting Director Identification Number, Name Approval and Incorporation into a single form, thereby reducing time taken for incorporation of a company. The World Bank does not recognize this since a third of new companies have used this platform from its inception in 2015 rather than half as required by the metric.
Several measures introduced by the Central Government to facilitate micro, small and medium enterprises such as streamlining of inspections and self-certifications are also not part of the ten indicators covered by the World Bank. There has been considerable progress in these areas, said CII. In addition, online registration of ESIC and EPFO, as also other simplifications in labour regulations are not included in the ranking list.
On environmental and forest clearances too, the Central Government has taken steps for fast-tracking approvals.
The states have undertaken many reforms for Ease of Doing Business, emphasized CII. For example, in starting a business, Punjab, Odisha, Andhra Pradesh and others have set up centers to clear new proposals in a time-bound manner. Many states have moved quickly on land acquisition, industrial clusters, and land banks. On labour reforms, Jharkhand, Rajasthan and Madhya Pradesh have worked on registration and licensing under various labour Acts. Maharashtra, Madhya Pradesh, Sikkim, and other states have introduced best practices in resolving commercial disputes, while Andhra Pradesh and Karnataka have facilitated payment of taxes.
"The spirit of competitive and cooperative federalism is kindling focus by states on attracting investors by building facilitative investment climates, "noted Dr Forbes. "As these procedures take time to evolve across the country, we are confident that the World Bank Doing Business Report in later years would reflect the improvement in Ease of Doing Business," concluded the CII President.
