Ease of Doing Business in India

1. Ease of Doing Business in India
By Adithya Shashidhara

2. How is Ease of
Doing Business
quantified?

3. What is Ease of Doing Business?
● The ease of doing business index is an
index created by Simeon Djankov at the
World Bank Group.
● It is based on an annual report called
Doing Business, first published by World
bank in 2003 that is an independent
objective assessment of business
regulation across 190 economies covering
entire lifecycle of a business.
● It is measured by calculating the average
of 10 sub indices.
● It offers information about a country on
Distance to frontier, entrepreneurship,
best practices and transparency in business
regulation.

4. The Ease of Doing Business rankings are based on World
Bank’s Doing Business report.
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5. Impact of a Single subindex.
Canada ranked third on the first subindex "Starting a business" behind only New
Zealand and Australia. In Canada there is 1 procedure required to start a business
which takes on average 5 days to complete. The official cost is 0.4% of the gross
national income per capita. There is no minimum capital requirement. By contrast, in
Chad which ranked among the worst (181st out of 185) on this same subindex,
there are 9 procedures required to start a business taking 62 days to complete. The
official cost is 202% of the gross national income per capita. A minimum capital
investment of 289.4% of the gross national income per capita is required.
Canada ranked 17th worldwide whereas Chad stood last at 185.

6. India has successively improved its position in the Doing
Business report.
● Biggest improver in
the world in terms of
rank.
● Best performance of
India since the
inception of the report
in 2003.
● Business reforms
action plan was
launched in 2015 to
percolate learnings
from surveys.

7. Highlights of India’s Performance

8. Indicator wise rank improvement over last year

9. A very conducive environment for investment exists and FDI
has been on the rise.
1. RBI is among the best central banks in
the world and controls the monetary
policy of India and acts as a watchdog
over the banking system
2. SEBI acts as the regulator of the stock
exchanges –BSE and NSE, was
applauded for its strong mechanisms
that weathered the 2008 global crisis
Strong Financial Regulatory System
1. BSE is the world’s largest stock
exchange in terms of number of listed
companies; NSE takes the third spot in
terms of number of transactions
2. In 2017, net foreign investment in
equity and debt markets was USD30
billion and USD26.3 billion, respectively
Prominent Stock Exchange
1. India stands 77th among 190 countries
on the Ease of Doing Business scale.
2. New measures taken by the government
to facilitate business like digitisation and
a one-stop licensing system will
significantly boost India’s ranking.
3. Telangana Govt. declares no need to pay
for projects under Rs. 2 crore value if
paperwork is delayed by more than 15
days.
Ease of Doing Business
1. Competitive federalism means that
regional or local governments compete
with other regional or local
governments. Investors choose which
regional or local government to invest
in.
2. This persuades state governments to
ensure utmost satisfaction to investors.
Competitive Federalism
Source : https://rbi.org.in/Scripts/AnnualReportPublications.aspx?Id=1249

10. India’s
Improvement
over last 4 years.

11. The gap between India and Frontier has decreased

12. Dealing with Construction Permits (132 rank improvement)
● Implemented an online single window system, integrating internal and external
departments, removing requirement of visiting them individually.
● Time taken to process all approvals during the construction lifecycle has been
reduced from 185.9 to 94.8 days.
● Deemed approvals introduced if approvals are not granted within defined
timelines.
● Risk based classification of buildings introduced for fast-tracking building plan
approval, inspection and grant of occupancy-cum-completion certificate.
● Introduction of Unified Building Bye Laws in Delhi.
● Cost for obtaining construction permits reduced from 28.2% to 5.3% (% of cost
of construction)
● Procedures reduced from 27 to 20 in Mumbai and 24 to 16 in Delhi

13. Getting Electricity (113 rank improvement)
1
Procedures reduced from 7
to 3.5
3
Cost
Cost to obtain electricity
connection reduced from
487.7% to 29.5% (% of
income per capita)
5
Rationalisation of Tariff
2
Time
Time taken to obtain
electricity connection has
reduced from 105 to 55
days.
4
Process
The process of getting new
commercial electricity
connection has been
streamlined by making it
online and reducing the
number of procedures.

14. Trading across Borders (46 rank improvement)
Electronic Self Sealing
Electronic self-sealing
option at factory premises
reduces time associated
with customs clearance
Single window interface
ICEGATE portal
e-Sanchit
This made digital filing of
documents possible
Advanced bill of entry
Advance bill of entry facility
allows importers to initiate
customs clearance before
arrival of goods at the port,
thus reducing clearance
time
Expanded Infrastructure
Fourth container terminal at
JNPT provided an additional
capacity of 2,400,000 TEUs
05
01
02 03
04

15. Paying Taxes (35 rank improvement)
Introduction of GST replaced multiple single taxes with a single
universal tax.
Electronic system for payment of EPF & ESI enabling easier filings
and return payment
Reduction in administrative charges by EPFO
Provisions related to income tax audit simplified
Reduced corporate income tax rate for companies with turnover up to
INR 250 crore

16. Resolving Insolvency (29 rank improvement)
1. Introduction of reorganization as a resolution mechanism through enactment of
a new Insolvency and Bankruptcy Code.
2. Introduced a time bound reorganization procedure for corporate debtors and
facilitated continuation of the debtor’s business during insolvency proceedings.
3. Professional institutions established resulting in effective handling of
Restructuring and Insolvency Proceedings.

17. How did we get
here?

18. Transformative Measures
Legislative and Regulatory changes
1. Introduction of Unified Building Bye Laws, 2016
Amendment of Arbitration and Conciliation Act and
Companies Act, Development Control Regulations
2. GST, IBC and common courts act
Trust and Verify
1. Introduction of third-party and self-certification
2. Notarized affidavits replaced by e-undertakings
3. Risk based profiling and approvals for Construction
Permits & Trading Across Border
Government Process Reengineering
1. Common Application Form for Construction Permits
2. Introduction of provision for deemed approvals in
Construction Permits and Starting a Business
3. Direct Port Delivery/Entry for faster custom
clearance
4. Adoption of single form for 5 services – SPICe
Reduction in Fees
1. Zero fee for registration under Shops and
Establishments Act
2. Cost of obtaining Construction Permits reduced
3. Cost of obtaining new electricity permit reduced

19. Technology driven Governance eliminates
personal interface
1. Single Window Interface for Facilitating Trade on ICEGATE portal
2. e-Sanchit enabling digital filing of documents
3. Mandatory use of e-payment, e-invoice and e-delivery by all maritime
stakeholders (through Port Community System)
4. Online registration under GST
5. Electronic system for payment of social security contributions enabling easier
return payment and filing
6. Online registration under Shops and Establishments Act in Mumbai and Delhi
Online single window for all construction related approvals
7. Color coded zonal maps of various agencies made available online to determine
NoC requirement for plots

20. The road ahead.

21. Road Ahead ; Envisioning top 50
Register company through single online form in a day Get consignments through ‘Direct Port delivery’
Register property via online system using e-stamps.
Reduce frequency of Power outages to at max one
event and a duration of 30 minutes annually.
Use online procedures for exporting
In case of dispute, file a case electronically
All construction approvals to be given online through
single window without any physical point.

22. Enabling a conducive business environment (1/2 )
1. Develop a strong feedback mechanism on business regulations
2. Targeted approach to identify and remove redundant
regulations
3. Align future regulation to user needs.
Participative journey towards business reforms
Reengineering entire value chain
1. Identify focus sectors based on inherent strengths and future
prospects
2. Analyse and refine value chain for each focus sector to boost it
by eliminating shortcomings
3. Encourage standardization of rules and procedures pan india
across different levels of governance.

23. Enabling a conducive business environment (2/2 )
1. Streamline and improve connectivity with industrial parks
2. Focus on setting up quality infrastructure which may include an
ecosystem of standards, accreditation and certification,
laboratories and inspection bodies
3. Align future regulation to user needs.
Industry ready infrastructure
eGovernment : Removing barriers
1. All information related to compliance to regulations must be
made available online
2. All government services for businesses must be delivered
electronically within a timeframe

24. !?