Lok Sabha Question No. 5022 (UNSTARRED), answered on 2017-03-31
Subject: Growth of Corporate Sector
Ministry: CORPORATE AFFAIRS
Asked by: BHAIRON PRASAD MISHRA, GAURAV GOGOI

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

UNSTARRED QUESTION NO. 5022 ANSWERED ON FRIDAY, THE 31st MARCH, 2017 [CHAITRA 10, 1939 (SAKA)]

## GROWTH OF CORPORATE SECTOR QUESTION

5022. SHRI BHARION PRASAD MISHRA: SHRI GAURAV GOGOI:

Will the Minister of CORPORATE AFFAIRS कारपोरेट कार्य मंत्री

be pleased to state:

- (a) the details of growth made by the Indian corporate sector during the last three years including the current year;
- (b) whether the Government has been successful in achieving Ease of Doing Business in the corporate sector for both corporate/foreign entities and common man of the country;
- (c) if so, the details thereof along with the targets set for the purpose for the next two years;
- (d) the details of employment creation in the country in the last three years by the Indian corporate sector; and
- (e) the alternative measures adopted by the Government to promote growth of corporate sector in the country?

## ANSWER

MINISTRY OF CORPORATE AFFAIRS                (SHRI ARJUN RAM MEGHWAL)

श्री अर्जयन राम मेघवाल )

THE MINISTER OF STATE IN THE कारपोरेट कार्य मंत्रालर् में राज्र् मंत्री (

(a):    The  growth of Indian corporate sector in terms of number of active companies for the financial year 2013-14, 2014-15, 2015-16 and 2016-17 is given below:

|   As on 31st March | Number    |
|--------------------|-----------|
|               2014 | 9,52,433  |
|               2015 | 10,22,011 |

| 2016   | 10,88,780   |
|--------|-------------|
| 2017*  | 11,58,095   |

*As on 28.02.2017.

## Contd….P.2/

-2-

(b)&(c):  Yes,  Madam.  The  Doing  Business  Report  ranks  countries  on  the basis  of  Distance  to  Frontier,  an  absolute  score  that  measures  the  gap between India and the global best practice on the 10 specified indicators. India's absolute score improved from 53.93 in DBR 2016 to 55.27 in DBR 2017.  This is the first time that India has improved its absolute score in two  consecutive  years.    Additionally,  India's  Distance  Frontier  score improved on 7 out of the 10 indicators, showing that India is increasingly progressing towards best practice.  The Government's target is to improve the business regulatory environment of India and India's ranking in World Bank's Doing Business Report.  Reforms undertaken on various parameters of Doing Business towards easing the business environment in the country are given at annex-I.

(d) :  The impact of corporate growth on employment scenario in the country has not been assessed.

(e) :  The Ministry of Corporate Affairs has taken a number of measures to promote growth of corporate sector and improve ease of doing business in the Country. These include, inter alia, (i) doing away with the payment of minimum paid up capital at the time of incorporation as well as declaration of commencement of business by the companies, (ii) mandatory common seal for companies is made optional, (iii) setting up of Central Registration Centre (CRC) for name  availability and incorporation/registration of companies  as  a  part  of  government  process  re-engineering  (GPR),  (iv) deployment of Simplified Proforma for Incorporating Company electronically (SPICe), and (v) granting of various exemptions/relaxations from  the  provisions  of  the  Companies  Act,  2013  to  companies  including startups, subject to certain conditions.

*****

## Annex-I

## ANNEXURE REFERRED TO IN ANSWER TO LOK SABHA UNSTARRED QUESTION NO. 5022 FOR 31.03.2017 REGARDING GROWTH OF CORPORATE SECTOR

## Ease of Doing Business (as on 02.02 2017)

1. Ease of doing business is a fundamental priority of our Government's Make in India campaign. Unless we can make it easier for business to invest, operate and stay in India, we will not be able to create the jobs that India's young population requires. The ease of doing business index is meant to measure regulations directly affecting businesses and a nation's ranking is based on the average of 10 indicators.
2. The Central Government along with State Governments and UT administrations has undertaken a strategic and comprehensive reform package over the last two years which has greatly contributed to strengthening investor confidence.
3. In Doing Business Report (DBR) 2016, India had jumped 12 places. However, in the 2017 report the ranking showed only a minor improvement despite the efforts and reforms undertaken by the Centre and the States. The World Bank recognized reforms under four of the 10 indicators. The 'distance to frontier' (DTF) score measurement used by the World Bank to ascertain the distance between each economy and the best performance in that category has improved for seven of the 10 indicators.
4. Some of the improvements mentioned in the DBR 2017 are in the parameters 'getting electricity' in Delhi, 'paying taxes' through the electronic system for employees State insurance contributions, 'trading across borders' by launching of the ICEGATE portal and simplification of border and documented procedures and 'enforcing contracts' through establishment of dedicated divisions for resolving commercial cases. The report has especially lauded India for achieving significant reduction in time and cost to provide electricity connections to businesses in Delhi.
5. Some of the reforms undertaken by the country towards easing the business environment in the country are listed below:-

## REFORMS UNDERTAKEN ON VARIOUS PARAMETERS OF DOING BUSINESS

## 1. STARTING A BUSINESS

-  The Companies (Amendment) Act, 2015 has eliminated the need of a common company seal for incorporation.
-  Registration  with  ESIC  and  EPFO  has  been  made  real-time  by eliminating all physical touch-points.
-  The requirement of opening a bank account has been removed as a mandatory condition for registration with ESIC and EPFO.
-  "Shram  Suvidha"  Portal  has  been  launched  to  issue  Unique  Labour Identification Number (LIN), submission of common electronic returns under 16 Labour Acts and facilitate risk based inspections.
-  Maharashtra has combined the process of registration with VAT and Profession Tax. The registration is now being granted within 24 hours in Mumbai.

Contd…P.2/

-2-

-  SPICe form has been notified as sole application form for incorporation of companies (w.e.f., from 01.01.2017). The fee for filing the incorporation form has been reduced from Rs.2000/- to Rs.500.
-  No Environment clearance is required for 36 white industries.
-  Mine prospecting projects have been exempted from the requirement of compensatory afforestation and Forest Rights Act (FRA) certificate for grant of forest clearance.
-  No  site  inspection  is  required  for  mine  prospecting  projects  on forestland for less than 100 ha. for construction of new roads/drilling of bore hole/ sample collection pits.
-  Validity of Environment Clearance has been increased from 5 years to 7 years.
-  Online submission of applications for environment/forest/wildlife clearances  has  been  put  in  place  for  transparent  and  expeditious decision-making.
-  District Environment Impact Assessment authority has been constituted  to  grant  EC  for  mining  of  minor  minerals  for  5  ha.  of individual lease and 25 ha. in a cluster.
-  Regional  empowered  committees  at  sub  national  level  have  been delegated higher powers to dispose of proposals for Forest Clearance (a)  Involving  diversion  of  5  to  40  hectares  of  forest  land  and  (b)  All
- proposals involving diversion of forestland for linear projects irrespective of area of forest land involved.
-  The  competent  authorities in  the  state  government  have  been delegated powers to issue permission for tree felling and commencement  of  work  for  a  period  of  one  year  of  linear  projects without waiting for final approval under the Forest Conservation Act.
2. CONSTRUCTION PERMITS
-  Municipal Corporation of Greater Mumbai (MCGM) has completed the process  of single  window  approval  by  integrating  with  internal Departments  as  well  as  external  Departments  like  AAI  and  NMA through a common application form.
-  In Mumbai, the building completion certificate and occupancy certificate  can  now  be  processed  simultaneously  through  singlewindow approval system.
-  Site inspection for construction permits has been minimized by way of self-  certification  and  introducing  third  party  certification.  During construction,  submission  of  video  clips  by  architects  has  been introduced in online Auto DCR system.
-  AutoCAD  based  software  to  scrutinize  building plans  has  been implemented.
-  Both Municipal Corporation of Delhi (MCD) and MCGM has introduced digital signing of building permit application, as well as maps, thereby eliminating  need  of  physical  submission  of  documents.  The  manual application for grant of construction permits has been discontinued.
-  MCGM and MCD Single Window Application System have a provision for online transfer of application and receipt of NOC.
-  MCD  has  completed  the  process  of  single  window  approval  by integrating with internal departments as well as external Departments like DMRC, Delhi Fire Services, DUAC, AAI and NMA through a common application form. NOC from Labour Department of Delhi Government is not  required  if  no  manufacturing  activity  is  being  undertaken  in  the building.
-  MCD has eliminated the need for applicant to visit the Property Tax Department to collect receipt of tax payment.
-  Delhi  Development  Authority  (DDA)  has  notified  the  Unified  Building Bye-laws.  The  unified  building  bye  laws  have  provision  of  deemed approval of sanctioning building plans within 30 days.
-  Colour coded maps have been developed by AAI, DUAC and DMRC to enable applicants to determine whether NOC is required for the land for which permission is applied for.

Contd….P.3

-3-

-  88%  of  building  plans  have  been  sanctioned  online  by  Municipal Corporation of Delhi.
-  Infrastructure  charges  have  been  abolished  by  Delhi  Jal  Board Authority  for  commercial/  industrial  connections.  The  development Charges for commercial and industrial water connections upto 50 sq. m is Rs. 45000 and above 50 sq. m is Rs. 1 lakh.

## 3.

## GETTING ELECTRICITY

-  Online  application  for  connections  above  100KVA  mandatory  in Maharashtra and Delhi.
-  Delhi  Electricity  Regulatory  Commission  (DERC)  has  rationalized  LT and HT tariff thereby allowing LT connections upto 150KVA.
-  In  Delhi  and  Mumbai,  for  getting  a  new  electricity  connection  the number  of  procedures  has  been  reduced  to  3.  Further,  DERC  has revised  the  application  format  of  Delhi  Electric  Supply  Code  and Performance Standards Regulations, 2007 for faster release of electricity connection. The distribution licensees have been directed to process applications in the revised format along with the declaration form. Following are the two documents required for getting electricity connection:
1. Identity proof
- 2.
- Proof of ownership/ occupancy of premises.
-  NOC/Consent  to  Establish is not required for getting industrial electricity connection for setting up new industries and projects.
-  Amendments in Central Regulatory Authority regulation has been done to  allow  installation  of  transformers  up  to  500  KVA  on  double  pole structure.
-  Amendments in Central Regulatory Authority notification to waive off electrical approval for 11 KV installations carried out by DISCOMs and allowing self-certification by DISCOMs engineers.
- Supply Code Regulation and Standard of Performance (SOP) regulations have been modified by DERC and MERC to complete the process within
-  15 days.
-  Now the industrial/ commercial connections are being granted within 15 days in Delhi and Mumbai.
-  Tata  power  has  improved  its  System  Average  Interruption  Duration Index (SAIDI) by 2.42 and it's System Average Interruption Frequency Index (SAIFI) by 2.41.
-  Brihanmumbai Electricity Supply and Transport (BEST) has improved its System Average Interruption Duration Index (SAIDI) by 1.72 and it's System Average Interruption Frequency Index (SAIFI) by 3.26.

## 4.

## TRADING ACROSS BORDERS

-  Reforms affecting import of automobile parts from Korea: In JNPT there are 1637 import declarations filed during the period from 1st June 2015 to 31st May 2016 (the period of World Bank case study). The average time taken for giving cargo clearance by Customs authorities is 19.59 hours, wherever importer has paid appropriate Customs duty. Further, it  is  important  to  note  that  more than 80% of automobile shipments coming  from  Korea  are  treated  as  risk-free  and  Customs  gives clearance within 6 hours, in cases where importer has paid appropriate Customs duty.
-  Reforms affecting export of electrical machinery to New York: As of January 1, 2016, Indian Customs Authorities do not require users to physically  sign  any  documents,  provided  that  the  documents  are digitally signed.

Contd…P.4/

-4-

-  On April  1,  2016,  the  Central  Board  of  Excise  and  Customs  of  India launched  the  Customs  Electronic  Commerce  Interchange  Gateway (ICEGATE)  portal,  which  allows  for  e-filing  of  integrated  customs declaration, bill of entry and the shipping bill. ICEGATE also facilitates data and communication exchanges between applicants and customs.
-  Central Board of Excise and Customs (CBEC) has implemented Single Window Interface for Facilitating Trade (SWIFT) (online single window for clearance of goods) on the ICEGATE portal by integrating 6 other Departments  viz.  FSSAI,  Animal  Quarantine,  Plant  Quarantine,  Drug Controller, Wildlife Control Bureau and Textile Committee for imports. Also, online message exchange system under single window between Customs'  ICEGATE  and  Plant  Quarantine  Information  System  (PQIS) has been implemented for import clearances of agricultural commodities.
-  Customs'  risk  management  system  has  been  extended  to  other regulatory agencies to ensure riskbased inspection. 168 low phytosanitary risk agricultural commodities listed under schedule VII of the PQ order, 2003 have been identified for 5% random inspection. Mandatory testing of imports from countries where azo dye has not been banned has been reduced to 25%.
-  The limit on the number of consignments released under direct delivery has been removed facilitating prompt delivery of goods.
-  Terminal  handling  receipts  have  been  eliminated  from  Jawaharlal Nehru Port Container Terminal, Gateway Terminals India and Nhava Sheva International Container Terminal by web based e-form 13.
-  Filing of import and export declarations and manifests has been made online  with  digital  signature.  Importers,  exporters  using  services  of Customs  Brokers, shipping lines and airlines can file  customs documents under digital signature mandatorily w.e.f. 01/01/2016.
-  Electronic  messaging  system  between  shipping  and  custodians'  i.e. electronic delivery order instead of manual, paper based delivery order was introduced vide circular dated 14/10/2016.
-  Customs' Clearance Facilitation Committee has been set up at every major customs seaport and airport at Central level.
-  The  system  of  physical  control  and  locking  of  public  and  private warehouses  by  Customs  has  been  dispensed  with  and  replaced  by record based controls.
-  Customs 24x7 clearances is now available on 19 sea ports and 17 Air Cargo ports.
-  Reduction in number of mandatory documents required for exports and imports  to  3  each  for  export  and  import.  Earlier  7  documents  were required for exports and 10 for imports. Implemented vide notification dated 12.03.2015.
-  The port has reduced the "Gate in" time period for export containers from 5 days to 4 days which will further reduce export dwell time by another 24hrs.
-  CBEC relaxed KYC norms with regard to consignments imported by individual vide circular dated 26.04.2016.
-  Facility  of  deferred  payment  for  select  category  of  importers  and exporters has been introduced. This provision enables release of cargo without payment of duty, which shall enable speedier clearance and improved liquidity in hands of the businesses.
5. RESOLVING INSOLVENCY
-  Constitution of National Company Law Tribunal and National Company Appellate Law Tribunal has been operationalized.

Contd……P.5/

-5-

-  Insolvency  and  Bankruptcy  Board  of  India  has  notified  liquidation norms on 15th December, 2016 under Insolvency and Bankruptcy Code.
-  The Corporate Insolvency Resolution provisions have been notified on 30th  November,  2016  to  implement  the  Insolvency  and  Bankruptcy Code.
-  Regulations  for  Insolvency  Professionals  have  been  notified  on  23 rd November, 2016 for implementing the Insolvency and Bankruptcy Code.
-  Regulations for Insolvency Professionals Agency have been notified on 21st  November, 2016.

## 6. ENFORCING CONTRACTS

-  On  7th January 2016, the Maharashtra  High Court established Commercial  Division  benches  and  Commercial  Appellate  Division benches under the High Court.
-  Commercial divisions and appellate divisions in Delhi High Court have been established.
-  The Arbitration and Conciliation Act has been amended to reduce the time taken in arbitration proceedings and grounds on which an award may be challenged.
-  National Judicial Data Grid (NJDG) was opened to general public on 19th September, 2015. NJDG is a national data warehouse for case data including case registration, cause list, case status and orders/judgments of courts across the country till District Level Courts.

## 7. REGISTERING PROPERTY

-  Mumbai: Integration of Sub Registrars' offices with the Land Records Department  has  been  completed.  Registration  data  is  being  shared with the Land Records Department as part of the LR-SRO linkage under the National Land Records Modernization Program. This has been done for  e-mutation  in  rural  areas,  and  is  presently  being  implemented across 358 tehsils comprising 427 Sub Registrar Offices in the state.
-  In Maharashtra, all property tax records have been digitized.
-  In  Mumbai,  citizens  can  review  the  property  details  using  e-search facility.
-  In  Mumbai, appointments to SRO have been made online through eStepIn books slot.
-  Grievances related to immovable property registration in Maharashtra has been made online.
-  Further, a project for 'e-DISNIC software' (Revenue Courts) for making the land dispute information available online has been rolled out.
-  Delhi:  Out  of  356  villages,  52  villages  have  their  textual  data  fully digitized  and  online  digitally  signed  RORs  are  being  issued.  An additional  63  villages  will  have  their  RORs  issued  online  soon. Digitization  of  cadastral  maps  has  been  done.  28  maps  have  been validated. The integration of textual and spatial data has started.
-  In Delhi, all sub-registrar offices have been digitized and sub-registrars' records have been integrated with the Land Records Department.
-  In Delhi, model sale deed format for property registration is available on the website of Department of Revenue.
-  In  Delhi,  an  electronic  database  for  recording  boundaries,  checking points and providing cadastral information has been completed.
-  In  Delhi,  linking  of  land  ownership  registry  and  mapping  agency database on a pilot basis have been completed.

Contd……P.6/

-6-

## 8. GETTING CREDIT

-  SARFAESI  (Central  Registry)  Rules,  2011  has  been  amended.  The amendment  modifies  rule  4  to  include  additional  types  of  charges, including: "security interest in immovable property by mortgage other than deposit of title deeds"; "security interest in hypothecation of plant and  machinery,  stocks,  debt  including  book  debt  or  receivables"; "security interest  in  intangible  assets,  being  know-how,  patent, copyright,  trademark  or  any  other  business  or  commercial  right  of similar  nature";  and  "security  interest  in  any  under  construction residential or commercial building or a part thereof". This amendment allows  (Central  Registry  of  Securitization  Asset  Reconstruction  and Security Interest) CERSAI to register these additional charges.

## 9. PAYING TAXES

-  Payment  of  Employee  State  Insurance  Corporation  and  Employee Provident  Fund  Organization  contributions  can  now  be  made  online through 58 banks, debit cards or credit cards.
-  ESIC and EPFO returns have also been unified and are available on Shram Suvidha Portal.
-  Sales  tax  department  of  Maharashtra  has  eliminated  physical  touch point  for  filing  of  tax  returns,  tax  payment  and  tax  compliances  by introducing  online  return  filing  and  online  payment  through  GRAS (Government Receipt Accounting System) for VAT, CST, Profession tax, Luxury Tax and Entry Tax.
-  Electronic Verification Code (EVC) has been introduced as one of the possible mode for validation of tax returns. Earlier, some categories of taxpayers were required to submit Form ITR-V manually through post
- for validation of tax returns. Introduction of EVC has made the exercise of filing tax return electronic. It has also reduced the time period for filing the tax return considerably. During the year, income-tax returns were also made much simpler with culling of many irrelevant columns for all categories of taxpayers. Further, the Tax Audit Report which is required to be filed online was also standardized and harmonized with various provisions of the Companies Act.
-  An  option  for  e-filing  is  available  for  filing  or  revising  Corporate  Tax returns with        CBDT.

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