CII outlines measures to improve Ease of Doing Business to drive India’s mission of self-reliance

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With more outcome-oriented action on Ease of Doing Business, huge momentum to India’s domestic and overseas investment can be imparted at a time when self-reliance is being strengthened, stated the Confederation of Indian Industry (CII) in a press release. The industry body outlined key areas where strong measures in mission mode can help boost the economy.

“While many policies have been announced for a facilitative investment climate, effective translation into ground-level outcomes will help investor perceptions and further boost confidence. We believe that taking the ease of doing business route can unlock huge potential at a time when the world is seeking new investment opportunities,” CII Director General Chandrajit Banerjee said.

Central and State Governments have introduced a plethora of reforms across the various areas of doing business, which have contributed to India’s leap of 79 positions from the 142nd rank (out of 190 economies) in 2014 to the 63rd rank in the latest World Bank’s Ease of Doing Business (EODB) 2020 report. Sustaining this reform momentum can drive new investments including from overseas, stated CII.

CII identified immediate and medium term measures in eight areas for EODB that can reduce costs and time for making Indian industry competitive.

  • Effective implementation of online single window system is the first step towards strengthening EODB. Regular monitoring by the Chief Secretary of a state, time bound approvals and single interface should be implemented in all states. Currently, only 21 states have implemented this system. For a business entity, there should not be any other point of interface with the government, other than the SWS.
  • Simplifying property registration and acquisition of land is critical. Industry should be permitted to buy land directly from farmers with deemed approval after 30 days. Digitisation and integration of land records and single online portal with integrated information can help in titling.
  • Compliances for labour regulations could be speeded up at lower costs. States can follow the example of Uttar Pradesh by exempting industry from select labour laws for 3 years. The applicable limits under Industrial Disputes Act 1947, Factories Act 1948 and Contract Labour (Regulation and Abolition) Act 1970 must be raised immediately by all states.
  • At a time when India is seeking deeper overseas engagement, it is critical to ensure a quick and low-cost trade facilitation mechanism. The Single Window Interface for Facilitating Trade (SWIFT) system needs to bring on board all partner group agencies. The Risk Management System, Port Community System, and Authorised Economic Operators (AEOs) need to be strengthened, including through automation and digitisation.
  • Enforcing contracts is a challenge due to insufficient commercial courts and infrastructure. Major digital reforms such as virtual court proceedings, e-filing, and work from home could speed up court deliberations. The Alternative Dispute Resolution (ADR) institutions can be expanded in all parts of the country with arbitration and mediation centres. Over the medium term, judicial capacity must be enhanced with specialised commercial courts at high courts and district courts.
  • Synchronised joint inspections, computerised risk-based inspections, and differentiated inspection requirements for low-risk industries can reduce the inspection burden on companies. Self-certification and third party certification can be extended, as in Telangana where companies with good track record in the medium-risk category are permitted self-certification. In the medium term, an online central inspection system for labour, fire, lift, electricity, boilers, etc. is required.
  • MSME should be exempted from approvals and inspections for three years under state laws while following all rules. Self-certification route can be used for renewal and approvals for MSME with good track record.
  • India’s high logistics costs impact its competitiveness. This will require medium term action such as increasing the share of railways and waterways in transport, improving first and last-mile connectivity and reducing port dwell time. Cross subsidisation of freight should also be rationalised.

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