Lok Sabha Question No. 355 (STARRED), answered on 2017-03-27
Subject: Global Ranking on Ease of Doing Business
Ministry: COMMERCE AND INDUSTRY
Asked by: HEMAMALINI, ANANT KUMAR DATTATREYA HEGDE

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

## LOK SABHA

STARRED QUESTION NO.355.

TO BE ANSWERED ON MONDAY, THE  27 TH  MARCH, 2017.

## GLOBAL RANKING ON EASE OF DOING BUSINESS

## *355.  SHRIMATI HEMA MALINI: SHRI ANANTKUMAR HEGDE:

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

वाणिज् यवव द्यग ं ्री

- (a) whether the Government has fixed any target to improve India's Global ranking for Ease of Doing Business and if so, the details thereof;
- (b) India's current ranking in the World Bank's Ease of Doing Business ranking and the reasons for low ranking of the country;
- (c) whether  the  rank  of  India  has  improved  on  the  Ease  of  Doing  Business  global index over the last one year and if so, the details thereof;
- (d) the steps taken/being taken by the Government to improve the ranking on the said index; and
- (e) whether  these  steps  have  led  to  the  desired  outcome  and  if  not,  the  reasons therefor?

## 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) to (e): A Statement is laid on the Table of the House.

*******

## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF THE LOK SABHA STARRED QUESTION NO. 355 FOR ANSWER ON 27.3.2017.

- (a): Government of India has emphasized on the importance of 'Ease of Doing Business'  as a major  pillar of the 'Make  in India' initiative. The Government's  target is to improve the business regulatory environment of India and India's ranking in World Bank's Doing Business Report.
- (b) & (c): India ranks 130 th in the World Bank's annual Doing Business Report (DBR) 2017 as against 131 st rank  (Revised) in the Doing Business Report 2016. 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  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 as can  be  seen  from  the  table  given  below.  Additionally,  India's  Distance  to Frontier score improved in 7 out of the 10 indicators, showing that India is increasingly progressing towards best practice.

| Topics               |   DB 2015 | DB 2015 (Revised)   |   DB 2016 |   DB 2016 (Revised) |   DB 2017 |
|----------------------|-----------|---------------------|-----------|---------------------|-----------|
| Overall rank         |    142    | 134                 |    130    |              131    |    130    |
| Distance to Frontier |     52.67 | -                   |     54.68 |               53.93 |     55.27 |

The World Bank in its latest Doing Business Report 2017 has recognized the following Reforms:

- I. On Getting Electricity, the report recognized the efforts of Tata Power in Delhi  to  make  it  faster  and  cheaper  to  obtain  an  electricity  connection. These efforts, combined with efforts in Mumbai last year, have allowed India to improve its rank on this indicator from 137 in DB Report 2015 to 26 in this year's report, a 111 rank improvement.
- II.  The  report has also recognized the establishment of  Commercial Divisions  within  the  High  Courts  in  Delhi  and  Mumbai  to  deal  with commercial cases above ` 1 crore. This has allowed India to improve its rank by 14 places in 2 years.
- III.  In  the  area  of  Trading  Across  Borders,  the  report  recognized  the implementation  of  the  Single  Window  Interface  for  Facilitating    Trade (SWIFT), which integrates approvals and risk-based framework of customs  and  nine  departments  to  provide  traders  with  a  single  online interface for  clearances.
- IV. On  Paying  Taxes,  the  report  recognized  online  filing  and  payment  of returns at the Employee's Social Insurance Corporation.
5. (d) & (e): Government has urged the Central Government Ministries/ Departments to analyse the World Bank's latest Doing Business Report. Nodal Departments/Ministries have been identified  for each of the  10 indicators of the  Report.  The concerned Departments  in coordination with   Government

of  NCT  of  Delhi  and  Government  of  Maharashtra  are    responsible  for reducing procedures, time and cost across each  indicator. Further, Ministries/  Departments  concerned  have  been  asked  to  pursue  regular engagements  with  stakeholders,  conduct  workshops  with  the  users  and stakeholders to familiarize them with the reforms, take their feedback on a regular basis and take corrective action.  Ministries/ Department concerned have been provided with the  set of reforms  which need to be implemented and have been asked to identify additional areas related to the Department where  reforms  and  corrective  measures  need  to  be  taken  to  ensure  time bound and effective implementation of the reforms.    Some of the reforms undertaken  on  various  parameters  of  Doing  Business  towards  easing  the business  environment  in  the  country  are  annexed.      Due  to  the  reforms which  have  been  undertaken,  India's  absolute  score  has  improved  from 53.93 in  Doing  Business  Report 2016    to 55.27  in  Doing  Business  Report 2017.  Additionally, India's Distance to Frontier score improved  for 7 out of 10 indicators.

********

## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PARTS  (d)  &  (e)  OF  LOK  SABHA STARRED QUESTION NO. 355 FOR ANSWER ON  27.3.2017.

Some  of  the  reforms  undertaken  on  various  parameters  of  Doing  Business  towards easing the business environment in the country are listed below:-

## 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.
-  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.  PAN and TAN have now been integrated with SPICE.
-  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 single-window approval system.
-  Site  inspection  for  construction  permits  has  been  minimized  by  way  of  selfcertification 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.
-  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. 1lakh.

## 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.
3.  NOC/Consent to Establish is not required for getting industrial electricity connection for setting up new industries and projects.
4.  Amendments  in  Central  Regulatory  Authority  regulation  has  been  done  to  allow installation of transformers up to 500 KVA on double pole structure.
5.  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.
6.  Supply Code Regulation and Standard of Performance (SOP) regulations have been modified by DERC and MERC to complete the process within 15 days.
7.  Now  the  industrial/  commercial  connections  are  being  granted  within  15  days  in Delhi and Mumbai.
8.  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.
9.  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.
-  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 risk- based 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.
-  Insolvency  and  Bankruptcy  Board  of  India  has  notified  liquidation  norms  on  15 th 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  21 st 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 e-StepIn 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.

## 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.

********