Lok Sabha Question No. 154 (UNSTARRED), answered on 2017-07-17
Subject: Task Force on Ease of Doing Business
Ministry: COMMERCE AND INDUSTRY
Asked by: MAHEISH GIRRI

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION

## LOK SABHA

UNSTARRED QUESTION NO.154.

TO BE ANSWERED ON MONDAY, THE  17 TH  JULY, 2017.

## TASK FORCE ON EASE OF DOING BUSINESS

## 154.   SHRI MAHEISH GIRRI:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

वाणिज् यवव द्यग ं ्री

- (a) whether  the Government  has  set  up  a  dedicated  task  force in  each department  to  track  the  progress  on  ease  of  doing  business  and  if  so,  the details thereof;
- (b) whether the Government is planning to set up an evaluation mechanism to monitor activities being carried out by the respective departments related to ease of doing business;
- (c) if so, the details thereof; and
- (d) the other steps taken by the Government to promote ease of doing business in the country?

## ANSWER

## वाणिज् यवव द्यग ााज् यं ्रीस् वतं ््रभााा(स्रींतंरीिरंमलााीरीतंाांि( THE MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF COMMERCE & INDUSTRY (SHRIMATI NIRMALA SITHARAMAN)

- (a): Yes  Madam.    To  implement  the  reform  measures  for  ease  of  doing business a meeting was held at Cabinet Secretariat on 24 th November, 2016,  wherein  a  Ministry/Department  dealing  with  the  subject  was appointed as the nodal Ministry/Department for each indicator and was directed to set up a task force for implementation of reforms. Subsequently, Ministries/Departments started conducting the task force meetings.  The details of Nodal Ministry/Department appointed for each of the 10 indicators are mentioned below:

Ministry of Corporate Affairs - Starting a Business, Resolving Insolvency and Protecting       Minority Investors;

Ministry of Urban Development - Dealing with Construction Permits; Department of Justice - Enforcing Contracts;

|            | Ministry of Power - Getting Electricity; Department of Land Resources - Registering Property; Department of Financial Services - Getting Credit; Department of Revenue - Paying Taxes and Trading across Borders   |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) & (c): | This department regularly evaluates, monitors and reviews the progress of reforms undertaken by Departments/ Ministries and Government of NCT of Delhi and Maharashtra.                                            |
| (d):       | Some of the reforms undertaken by the Government towards easing the business environment in the country are annexed.                                                                                               |

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## ANNEXURE

## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PART  (d)    OF  LOK  SABHA UNSTARRED QUESTION NO. 154  FOR  ANSWER ON 17.07.2017.

Some  of  the  reforms  undertaken  by  the  country  towards  easing  the  business environment in the country are listed below:-

## 1. STARTING A BUSINESS

Simplified Proforma for Incorporating Company Electronically (SPICe) form has been  introduced  to  make  incorporation  of  companies  possible  within  one working day by imbibing 5 services viz. Name reservation, DIN, Incorporation, PAN and TAN. Earlier this used to take 30 days (1 day for DIN, 7 days for name reservation, 5 days for company incorporation, 10 days for PAN and 7 days for TAN registration as per DBR 2017).  This has also reduced the fees for filing the incorporation form INR 2000/- to INR 500.

-  Until  March  2017,  the  government  allocated  PAN  and  TAN  to  19,704  new corporate entities,  wherein  PAN was allotted within 4 hours to 95.63% of the 10,894  newly  incorporated  companies  and  TAN  was  allotted  to  99.73% applicants.
-  The Companies (Amendment) Act, 2015 has eliminated the need of a common company seal for incorporation.
-  Value  Added  Tax  (VAT)  Registration  is  now  processed  within  24  hour  using electronic application and does not require any inspection. Earlier this used to take 9-10 days in Delhi and Mumbai and also involved inspection. As per the January 2017 data 79% of VAT registrations in Mumbai were done in a single day.
-  In Mumbai, registering under Shops and Establishments has been made online without any physical inspection and registration is given within a day. 92% of the registration is given within a single day in January 2017. Earlier it used to take 2-6 days as per DBR 2017.
-  Registration with ESIC and EPFO has been made real-time by eliminating all physical touch-points. Inspection procedures associated with both procedures have been dispensed with.
-  "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.

## 2. CONSTRUCTION PERMITS

-  Both Municipal Corporation of Greater  Mumbai  (MCGM)  and  Municipal Corporation of Delhi (MCD) have reduced the number of procedures from 42 and 29 respectively to only 8. Also, the time taken in giving the various approval during the construction cycle of a building has been brought down to 60 days from last year 213 days in Delhi and 164 days in Mumbai.
-  In Delhi since last  few months  a  total of  2885  online applications for construction permits were received out of which 2466 were sanctioned within an average time of 18 days.
-  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.
-  Both  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.
-  There  is  an  online  common  occupancy-cum-completion  requirement  form (COCCRF) which captures requirement of all agencies for granting OCC.  This certificate is to be granted mandatorily within 22 days (15 days for inspection + 07 days for processing by MCD).
-  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.
-  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 INR 45000 and above 50 sq. m is INR 0.5 Million (1 lakh). No NOC is required from DJB for building plan approval.
-  MCGM  has operationalized online building plan approval system with integration of all internal/external agencies. Applicant is only required to submit common application form (CAF) which captures the requirements of Municipal Corporation and that of all internal/external agencies like AAI, NMA, Fire, storm water drain, sewage, Tree Authority, Revenue Department, etc.
-  Common  Application  Form  provides  an  online  calculator  on  the  website  to calculate  fees  and  charges  for  the  building  proponent.    Provision  has  been made for online payment of all fees/charges to MCGM.  This is transferred to concerned agencies through e-payment.
-  Timeframe for building plan approval has been fixed for 30 days, inspection for 07 days and OCC for 22 days, in all less than 60 days.  There is a provision under Maharashtra State Right to Service Act, 2015 to ensure that such time commitments  are  adhered  to  else  the  concerned  officers  is  to  be  penalized under  law.  In  Mumbai,  the  building  completion  certificate  and  occupancy certificate can  now be processed simultaneously through single-window approval system.
-  The Development Plan of Mumbai along with all plots has been mapped on GIS platform and the requirement for NOC from different agencies like AAI, NMA, etc.  as  Colour  Coded  Zonal  Maps  (CCZM)  and  have  been  superimposed  on GIS Map of Mumbai.  Hence, for every plot, building proponent can know which parts of common application form (CAF) is to be filled up.  No NOC is required if the building area falls outside CCZM of any agency.
-  Provisions  have  been  introduced  in  the  building  regulations  to  ensure  that parties (architect, engineer, construction company  etc.) involved in the construction process are held legally liable for defects such as structural flaws or problems in the building once it is in use
-  Mandated  that  any  party  (architect,  engineer,  Construction  Company  etc.) involved in the construction process is legally required to obtain a latent defect liability  or  decennial  (10  years)  liability-insurance  policy  to  cover  possible structural flaws or problems in the building once it is in use.
-  MCD has introduced system of risk based classification in the amended UBBL for  all  categories.  These  classifications  are  used  for  fast-pacing  the  building plan  approval,  inspection  and  grant  of  occupancy-cum-completion  certificate (OCC).

## 3. GETTING ELECTRICITY

-  Owing to the efforts of Ministry of Power and Government of NCT of Delhi and Maharashtra, rank in 'Getting Electricity' indicator leaped from 137 in DBR 2015 to 26 in DBR 2017.  A jump of 111 ranks!
-  Number of procedures for obtaining an electricity connection reduced from 5 to 3, namely:
-  Online submission of application to utility and conduct site inspection
-  Load sanction and demand note generation
-  Utility does external connection and installs meter
-  Online  application  for  connections  above  100KVA  mandatory  in  Maharashtra and Delhi. Now, it takes only 15 days to get an electricity connection.
-  Tata  Power  has  issued  250+  new  connections  above  50  KVA  and 85000+ new connections below 50 KVA in less than 15 days in the last one year
-  Brihanmumbai Electricity Supply and Transport (BEST) has issued 40+ new connections above 50 KVA and 4900+ new connections below 50 KVA in less than 18 days in the last one year
-  Delhi  Electricity  Regulatory  Commission  (DERC)  has  rationalized  LT  and  HT tariff thereby allowing LT connections upto 150KVA.
-  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  selfcertification 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.
-  Automated systems to monitor outages implemented

## 4. TRADING ACROSS BORDERS

-  Government  has  made  only  3  documents  mandatory  for  export  and  import which has made the process simpler and easier. There is significant reduction in time from 111 hours to 4 hours for imports and from 34 hours to 4 hours for exports after Central Board of Excise and Customs (CBEC) implemented Single Window Interface for Facilitating Trade (SWIFT).
-  The  launch  of  the  Customs  Electronic  Commerce  Interchange  Gateway (ICEGATE) portal has allowed e-filing of integrated customs declaration, bill of entry and the shipping bill. ICEGATE also facilitates data and communication exchanges between applicants and customs.
-  Other relevant developments include expanding the number of 24x7 customs clearance facilities, introducing changes to the period of warehousing, implementing  an  electronic  messaging  system  between  shipping  lines  and custodians for electronic delivery orders and reducing the number of required documents.  This  reform  applies  to  both  Mumbai  and  Delhi.  24X7  Customs clearance facility is available at 19 seaports and 17 Air Cargo complexes.
-  CBEC has implemented Single Window Interface for Facilitating Trade (SWIFT) on the ICEGATE portal by integrating 6 other Departments viz. FSSAI, Animal Quarantine,  Plant  Quarantine,  Drug  Controller,  Wildlife  Control  Bureau  and Textile  Committee  for  exports  and  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.
-  CBEC  have  merged  the  two  facilitation  schemes  namely  Accredited  Client Programme (ACP) and Authorized Economic Operator (AEO) programme into a combined  three-tier  AEO  programme  to  further  provide  facilitation/benefits  to the exporters/importers for efficient custom clearance based on their compliance history
-  Customs'  risk  management  system  has  been  extended  to  other  regulatory agencies to ensure risk- based inspection.
-  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.
-  Electronic messaging system between shipping and custodians' i.e. electronic delivery  order  instead  of  manual,  paper  based  delivery  order  has  been introduced.
-  The system of physical control and locking of public and private warehouses by Customs has been dispensed with and replaced by record based controls.
-  The Import Data Processing and Management System (IDPMS) has also been launched  to  facilitate  efficient  data  processing  for  payment  of  imports  and effective monitoring.
-  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.
-  Indian  Customs  has  done  away  with  routine  print-outs  of  several  documents related to customs clearance including GAR 7 Forms/ TR 6 Challans, TP copy, Exchange Control Copy of Bill of Entry and Shipping Bill, and Export Promotion copy of Shipping Bill

## 5. RESOLVING INSOLVENCY

-  The  Insolvency  and  Bankruptcy  Code,  2016  enacted  as  a  law  on  28th  May, 2016.
-  All the elements of the corporate insolvency eco-system, namely,
-  the National Company Law Tribunal (NCLT),
-  the National Company Law Appellate Tribunal (NCLAT),
-  the Insolvency Professionals (IP),
-  the Insolvency Professional Agency (IPA),
-  the Insolvency Professional Entity (IPE), and
-  the Insolvency and Bankruptcy Board of India

have been made operational

-  Eleven benches of the NCLT, approximately 1000 Insolvency Professionals, 3 IPAs and 2 IPEs are in operation
-  The corporate insolvency provisions of the Code have been commenced w.e.f. 01/12/2016 and liquidation provisions w.e.f. 15/12/2016.
-  At  present  144  cases  have  been  filed  with  various  benches  of  National Company Law Tribunal (NCLT) and out of which 89 cases have been disposed of till date.

## 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

-  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.
-  The iSarita system available in all SR offices has enabled online registrations in Mumbai as well  as  rest  of  Maharashtra.  iSarita  is  available  over  MPLS  VPN connections in the SR offices.
-  For  citizens,  various  aspects  of  the  registration  process  have  been  made available online:
- a) Citizens can review the property details using e-Search facility
- b)        Citizens  can  carry  out  data  entry  in  the  system  before  going  to  the  SR offices using the Public Data Entry portal
- c)  Appointment  slots  can  also  be  booked  using  the  eStepIn  system,  and d) make online payment using GRAS
-  The  grievance  management  system  (a  single  window  service  portal)  has already  been  implemented  by  Government  of  Maharashtra  -  called  "Aaple Sarkar" portal.
-  The Land  Records  (Cadastral  mapping  agency)  related grievances are reported through "Aaple Sarkar" portal to the Land Records Department.
-  Documents of last 30 years have been scanned and are available in eSearch; mortgages against properties are also available in eSearch. Negative property list is available in iSarita and the system issues alerts
-  Year-wise historical statement for number of documents registered and revenue collected is publically available.
-  All  land  parcel  maps  are  already  surveyed  as  a  part  of  City  Survey  under section  122  and  section  126  of  MLRC  1966  and  property  cards  (RoR)  are present in Digital form for all privately held land plots.
-  Necessary  amendment  has  been  made  to  mandate  the  adjudication  of  the cases/ disputes with regard to land within one year.
-  In Mumbai, Service delivery standards have been introduced to provide maps within a specific time frame though an online portal
-  In  Mumbai,  title  search  can  be  conducted  online  without  requirement  of  any physical visit
-  In Delhi, an electronic database for recording boundaries, checking points and providing cadastral information has been completed.
-  Property  tax  dues  can  be  accessed  online  free  of  cost  by  registered  users (property owners) through Property Identity Number (PID).
-  Online  database  has  been  developed  for  checking  for  encumbrances  (liens, mortgages, restrictions and the like).
-  In  Delhi,  grievances  related  to  land  can  be  made  online  on  Department  of Revenue's website through Registration Related Monitoring System.

## 8. GETTING CREDIT

-  SARFAESI (Central Registry) Rules, 2011 has been amended. The amendment provides  inclusion  of  additional  types  of  charges  such  as  security  interest  in immovable property by mortgage other than deposit of title deeds, hypothecation  of  plant  and  machinery,  stocks,  debt  including  book  debt  or receivables, intangible assets, etc. This amendment allows (Central Registry of Securitization  Asset  Reconstruction and Security Interest) CERSAI to register these  additional  charges.  Over  100,000  charges  on  movables  have  been registered thus far.
-  The amended SARFAESI Act 2002 provides priority to secured creditors to be paid first over all other debts and all revenues, taxes, cesses and other rates payable to the Central Government or State Government or local authority.

## 9. PAYING TAXES

-  In recent times, the focus of the Indian Government is to gradually reduce the corporate tax rate from 30% to 25% in medium term. The Government is also focusing on increasing the incentives for the small businesses and the MSME (micro, small and medium enterprises) industrial base.
-  The tax incentives provided to the small and medium sized businesses in the fiscal  year  2016  include  the  reduction  of  corporate  tax  rate  to  29%  for  the companies with turnover/gross receipts of INR 50 Million or less and reducing the tax rate to 25% for newly incorporated manufacturing companies. This has been further liberalised by reducing the corporate tax rate to 25% in the fiscal year 2017 for the companies with turnover/gross receipts of INR 500 Million or less. Also, tax incentive is provided to start-ups to promote setting up start-ups in India.
-  The  Government  is  driving  a  new  mantra  'RAPID-  revenue,  accountability, probity,  information  and  digitalization'  for  administrating  the  tax  reforms.  With project RAPID,  Government  is  trying to achieve the goal of  'minimum government  and  maximum  governance'  and  make  tax  compliances  more taxpayer-friendly,  transparent  and  eventually  leading  to  widening  of  the  tax base. There are visible efforts to facilitate,  inter  alia,  online  payment of  taxes and electronic filing, processing, analyzing and scrutiny of income tax returns.
-  The Income tax department in India has initiated an E-proceeding facility for all taxpayers  which  is  an  expanded  and  extended  form  of  e-assessment  (audit) involving direct communication between the taxpayer and the Department for all Income Tax proceedings including assessment (audit).
-  It  is  likely  that  Goods  and  Service  Tax  (GST)  would  be  effective  from  1  July 2017. GST will subsume all the indirect taxes and will be a game changer of these  times.  Under  the  GST  regime,  the  registration  number  would  be  PAN based and the details furnished  in  the  GST  return  would  also  be  reported  to Income Tax department. Also, the Tax Audit report would be furnished before the  inspecting  GST  authority.  Such  dialogue  between  these  tax  departments would  lead  to  reporting  of  consistent  data  by  the  taxpayer  and  would  boost better, harmonized and efficient tax compliances within the Indian economy and widening of the tax base.
-  Recently, the Provident Fund administrative charges have been reduced from 1.10% to 0.65% (change of .45%). This will reduce the overall tax rate in India.
-  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.
-  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.
-  In  India,  the  revision  of  return  of  income  is  a  completely  online  process  and revision by itself is not a criteria for selection of a case for scrutiny (audit). In India, selection of a case for scrutiny is based on several parameters under the Computer Aided Selection for Scrutiny (CASS) program.

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