FIRST TIME IN THE HISTORY, INDIA HAS JUMPED 30 PLACES TO BREAK INTO THE TOP 100 COUNTRIES FOR DOING BUSINESS AND SECURED 100TH RANK.
India is closer to global best practices in the regulatory framework for business; all this was achieved by the Narendra Modi government as exemplified by the World Bank’s latest report on Doing Business 2018.
“India’s performance is not based on efforts of just one year but consistent efforts made over the last three years to continuously improve the regulatory environment of doing business,” said by Annette Dixon, vice president South Asia, in a press conference.
It is the result of a number of reforms that the government has undertaken that India is becoming a preferred destination to do business. India’s impressive performance was largely due to reforms in taxation, insolvency laws and access to credit, part of measures Prime Minister Modi’s government has pushed to boost investment and jobs that would help absorb a million people who join the workforce every month.
Some of the major reforms of 2018 & 2017 are as under:
- Starting a Business: India made starting a business faster by merging the applications for the Permanent Account Number (PAN) and the Tax Account Number (TAN), and by improving the online application system.
- Dealing with Construction Permits: India made dealing with construction permits less cumbersome by implementing an online system that has streamlined the process of obtaining a building permit, thereby reducing the number of procedures and time required to obtain a building permit in India.
- Getting Credit: India strengthened access to credit by amending the rules on the priority of secured creditors outside reorganization proceedings and by adopting a new law on insolvency that provides a time limit and clear grounds for relief to the automatic stay for secured creditors during reorganization proceedings.
- Protecting Minority Investors: India strengthened minority investor protections by increasing the remedies available in cases of prejudicial transactions between interested parties.
- Paying Taxes: India made paying taxes easier by making payment of EPF mandatory electronically and introducing a set of administrative measures easing compliance with corporate income tax.
- Trading across Borders: India reduced import border compliance time in Mumbai by improving infrastructure at the Nhava Sheva Port. Export and import border compliance cost was also reduced in both Delhi and Mumbai by eliminating merchant overtime fees and through the increased use of electronic and mobile platforms.
- Enforcing Contracts: India made enforcing contracts easier by introducing the National Judicial Data Grid, which makes it possible to generate case measurement reports on local courts.
- Resolving Insolvency: India made resolving insolvency easier by adopting a new insolvency and bankruptcy code that introduced a reorganization procedure for corporate debtors and facilitated the continuation of the debtor’s business during insolvency proceedings.
- Labor Market Regulation: India increased the mandatory length of paid maternity.
- Getting Electricity: India made getting electricity faster and cheaper by streamlining the process of getting a new commercial electricity connection.
- Paying Taxes: India made paying taxes easier by introducing an electronic system for paying employee state insurance contributions.
- Trading across Borders: India made exporting and importing easier by launching Customs Electronic Commerce Interchange Gateway portal and simplifying border and documentary compliance procedures. This reform applies to both New Delhi and Mumbai.
- Enforcing Contracts: India made enforcing contracts easier by creating dedicated divisions to resolve commercial cases.
This is a significant movement and a very important barometer of India moving the right direction and in creating the kind of channels that will attract (foreign direct). According to Department of Industrial Policy and Promotion (DIPP), the total FDI investments India received during April-June 2017 stood at US$ 14.55 billion. Despite the reforms mentioned above, the main factors of the attraction of FDI also include Introduction of GST and new laws on Insolvency.
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