Lok Sabha Question No. 2047 (UNSTARRED), answered on 2018-07-30
Subject: Ranking on EoDB
Ministry: COMMERCE AND INDUSTRY
Asked by: BIDYUT BARAN MAHATO, GAJANAN CHANDRAKANT KIRTIKAR, PREM SINGH CHANDUMAJRA, R.P. MARUTHARAJAA, MUTHAMSETTI SRINIVASA RAO (AVNTHI), ADVOCATE NARENDRA KESHAV SAWAIKAR, SUDHEER GUPTA, KUNWAR HARIBANSH SINGH, A.T. (NANA) PATIL, S. RAJENDRAN, VIJAY KUMAR S.R., T. RADHAKRISHNAN

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

## DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION

## LOK SABHA

UNSTARRED QUESTION NO. 2047.

TO BE ANSWERED ON MONDAY, THE 30 TH   JULY,  2018.

## RANKING ON EODB

## 2047.  SHRI BIDYUT BARAN MAHATO:

SHRI GAJANAN KIRTIKAR:

PROF. PREM SINGH CHANDUMAJRA:

SHRI R.P. MARUTHARAJAA:

SHRI MUTHAMSETTI SRINIVASA RAO (AVANTHI):

ADV. NARENDRA KESHAV SAWAIKAR:

SHRI SUDHEER GUPTA:

KUNWAR HARIBANSH SINGH:

SHRI A.T. NANA PATIL:

SHRI S. RAJENDRAN:

SHRI S.R. VIJAYAKUMAR:

SHRI T. RADHAKRISHNAN:

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

## वाणिज्य एवं उद्योग मंत्री

- (a) whether  the  Government  and  the  World  Bank  have  recently  released  the rankings of States/Union Territories in India on the Ease of Doing Business (EoDB) recently;
- (b) if so, the details thereof including the details of ranking of each State/UT and the criteria/parameters fixed/adopted therefor, State/UT-wise;
- (c) whether the Government has taken any feedback from the industry this time to  assess  whether  the  reforms  percolated  to  the  ground  level  in  various States/UTs;
- (d) if so, the details thereof and the response of the industry in this regard; and
- (e) the  steps  taken/proposed  to  be  taken  by  the  Government  to  improve States/UTs and India's performance on EoDB in the country?

## ANSWER

वाणिज् य एवं उद्योग मंत्रालय में राज् यमंत्री (श्री सी.आर. चौधरी) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI C.R. CHAUDHARY)

- (a) to (d): Department of Industrial Policy & Promotion, in partnership with the World Bank Group, released the rankings of States/Union Territories under the Business  Reform  Action  Plan  (BRAP),  2017  on  10 th July,  2018  in  New Delhi.  A  372-point  Action  Plan  was  prepared  and  shared  with  the

States/UTs for implementation. The Action Plan is spread across 12 broad parameters,  viz.,  Labour  Regulation  Enablers,  Contract  Enforcement, Registering Property, Inspection Enablers, Single Window System, Land Availability  and  Allotment,  Construction  Permit  Enablers,  Environment Registration Enablers, Obtaining Utility Permits, Paying Taxes, Access to Information  &  Transparency  Enablers  and  Sector  Specific.  The  ranks obtained by the States/UTs are placed in Annexure-I.

The assessment under the BRAP, 2017 is based on a combined score consisting of - (i) Reform Evidence Score, which is based on evidences uploaded by the States/UTs and (ii) Feedback Score, which is based on the feedback garnered from the actual users of the services provided to the businesses.

The feedback survey on 78 out of 372 reforms was undertaken to ensure that  the  reforms are  actually  felt  at  the  ground  level.  The  feedback  was collected  through  interviews  of  actual  users  selected  from  the  data  of more  than  50,000  users  provided  by  the  State/UT  governments.  More than  5,000  private  sector  users  in  23  states/UTs  -  including  more  than 4,300  businesses  and  more  than  800  architects,  lawyers  and  electrical contractors from across the country have shared their experience.

Further  details  on  assessment  of  States/UTs  under  BRAP,  2017  are available on the web portal: http://eodb.dipp.gov.in/.

- (e) : Steps  taken/proposed  to  be  taken  to  improve  the  overall  business regulatory environment in the country are placed in Annexure-II.

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ANNEXURE-I ANNEXURE REFERRED TO IN REPLY TO PARTS (a) to (d) OF LOK SABHA

## UNSTARRED QUESTION NO. 2047 FOR ANSWER ON 30.07.2018.

| TOP ACHIEVERS (Above 95%)   | TOP ACHIEVERS (Above 95%)   | ACHIEVERS (90-95%)   | ACHIEVERS (90-95%)   | FAST MOVERS (80 - 90%)   | FAST MOVERS (80 - 90%)   | ASPIRERS (BELOW 80%)   | ASPIRERS (BELOW 80%)      |
|-----------------------------|-----------------------------|----------------------|----------------------|--------------------------|--------------------------|------------------------|---------------------------|
| Ran k                       | State                       | Rank                 | State                | Rank                     | State                    | Rank                   | State                     |
| 1                           | ANDHRA PRADESH              | 10                   | WEST BENGAL          | 16                       | HIMACHAL PRADESH         | 19                     | GOA                       |
| 2                           | TELANGANA                   | 11                   | UTTARAKHAND          | 17                       | ASSAM                    | 20                     | PUNJAB                    |
| 3                           | HARYANA                     | 12                   | UTTAR PRADESH        | 18                       | BIHAR                    | 21                     | KERALA                    |
| 4                           | JHARKHAND                   | 13                   | MAHARASHTRA          |                          |                          | 22                     | JAMMU & KASHMIR           |
| 5                           | GUJARAT                     | 14                   | ODISHA               |                          |                          | 23                     | DELHI                     |
| 6                           | CHHATTISGARH                | 15                   | TAMIL NADU           |                          |                          | 24                     | DAMAN & DIU               |
| 7                           | MADHYA PRADESH              |                      |                      |                          |                          | 25                     | TRIPURA                   |
| 8                           | KARNATAKA                   |                      |                      |                          |                          | 26                     | DADRA & NAGAR HAVELI      |
| 9                           | RAJASTHAN                   |                      |                      |                          |                          | 27                     | PUDUCHERRY                |
|                             |                             |                      |                      |                          |                          | 28                     | NAGALAND                  |
|                             |                             |                      |                      |                          |                          | 29                     | CHANDIGARH                |
|                             |                             |                      |                      |                          |                          | 30                     | MIZORAM                   |
|                             |                             |                      |                      |                          |                          | 31                     | ANDAMAN & NICOBAR ISLANDS |
|                             |                             |                      |                      |                          |                          | 32                     | MANIPUR                   |
|                             |                             |                      |                      |                          |                          | 33                     | SIKKIM                    |
|                             |                             |                      |                      |                          |                          | 34                     | ARUNACHAL PRADESH         |
|                             |                             |                      |                      |                          |                          | 34                     | LAKSHADWEEP               |
|                             |                             |                      |                      |                          |                          | 34                     | MEGHALAYA                 |

## ANNEXURE  REFERRED  TO  IN  REPLY  TO  PART  (e)  OF  THE  LOK  SABHA UNSTARRED QUESTION NO. 2047 FOR ANSWER ON 30.07.2018.

## A. World Bank's Doing Business Ranking (DBR)

Some of the major indicator wise reforms undertaken by the Government towards easing the business environment in the country are as under:

## (a) Starting A Business:

Reforms  accepted  in  DBR  2018: India  made  starting  a  business  faster  by introducing a single form SPICe (Simplified Proforma for Incorporating Company  electronically)  by  merging  five different applications  i.e.  Name reservation,  Company  incorporation,  Director  Identification  Number    (DIN), Permanent Account Number (PAN) and the Tax Deduction/Collection Account Number (TAN),  and  by  improving  the  online  application  system.  This  reform applies to both Delhi and Mumbai.

## Reforms implemented for DBR 2019 :

-  Discontinued the INC-1 eform and launched a new and simplified web based  service  i.e.  R.U.N.  (Reserve  Unique  Name)  on  26th  January, 2018. This has also removed the requirement to use a Digital Signature Certificate (DSC) during name registration
-  Applications  for  obtaining  Director  Identification  Number  (DIN)  for  first time directors in a new company now have to be mandatorily submitted through the SPICe eform
-  Incorporation fees  has  been  eliminated for  Companies  with  authorized capital up to INR 10 lakh
-  Applications required for PAN and TAN have been completely integrated into SPICe form eliminating need of submitting online a separate form. Additionally, PAN  and TAN  are mentioned in the Certificate of Incorporation (CoI) which is now a sufficient proof for PAN and TAN
-  Registration for EPFO & ESIC is available on Shram Suvidha Portal
-  Registrations under Mumbai Shops & Establishments Act are processed in real time and without any physical inspection

## (b) Dealing with Construction Permits:

Reforms accepted in DBR 2018: India made dealing with construction permits less cumbersome by implementing an online system that has streamlined the process at the Municipality of New Delhi and Municipality of Greater Mumbai. The online system 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.

## Reforms implemented for DBR 2019 :

-  All approvals of the construction lifecycle (i.e. from building plan approval till issuance of completion-cum-occupancy certificate) are issued online
-  Introduction  of  provision  of  decennial  professional  liability  insurance  in Delhi and Mumbai
-  Delhi  and  Mumbai  have  introduced  provision  of  joint  inspection  for issuance of Occupancy cum completion certificate

## (c) Getting Electricity:

## Reforms implemented for DBR 2019 :

-  In  Delhi,  service  line  charges  have  been  capped  to  INR  25,000/-  in electrified areas for Low Tension loads up to 150 KW
-  In Delhi, DERC regulations mandate that the electrical connection process must be completed within 15 days of the application's acceptance
-  In  Mumbai,  Reliance  Infrastructure  Limited  requires  the  applicant  to  pay the cost of electricity connection along with the first bill

## (d) Registering Property

## Reforms implemented for DBR 2019:

-  In Mumbai, deeds/title records have been digitized and have been made available online
-  In Mumbai and Delhi, maps have been digitized and made available online
-  Grievance  Redressal  Systems  have  been  implemented  for  Sub-registrar office (Mumbai and Delhi) and cadastral mapping agency (Delhi)
-  In Delhi, property transaction statistics have been made available online

## (e) Getting Credit:

Reforms  accepted  in  DBR  2018: India  strengthened  access  to  credit  by amending  the  rules  on  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. This reform applies to both Delhi and Mumbai.

Reforms implemented for DBR 2019 : Notified and started the implementation of Section 20A of the SARFAESI Act with the objective of integration of all state and central registries with the CERSAI registry.

## (f) Protecting Minority Investors:

Reforms  accepted  in  DBR  2018: India strengthened minority investor protections by increasing the remedies  available in cases  of prejudicial transactions between interested parties. This reform applies to both Delhi and Mumbai.

## (g) Paying Taxes:

Reforms accepted in DBR 2018: India made paying taxes easier by making payment  of  Employee  Provident  Fund  (EPF)  mandatory  electronically  and introducing a set of administrative measures easing compliance with corporate income tax. This reform applies to both Delhi and Mumbai.

## Reforms implemented for DBR 2019 :

-  The implementation of GST has subsumed all indirect taxes including (i) Service  Tax  (ii)  Value  Added  Tax  (ii)  Central  Sales  Tax  and  (iv)  Excise Duty. Unification of these taxes will reduce the cascading effect of taxes and make taxes paid on inputs creditable to a higher percentage. Also, it is expected to reduce the time spent on filing and returns
-  Corporate income tax has been reduced from 30% to 25% for companies with a turnover up to INR 250 crores
-  Under the GST, Integrated Goods & Service Tax (IGST) is fully allowed as credit as against Central Sales Tax levied on which no input tax credit was allowable in erstwhile VAT regime, thereby reducing effective tax rate

## (h) Trading Across Borders:

Reforms accepted in DBR 2018: India reduced import border compliance time in  Mumbai  by  improving  infrastructure  at  the  Nhava  Sheva  Port.  Export  and import border compliance cost were also reduced in both Delhi and Mumbai by eliminating merchant overtime fees and through the increased use of electronic and mobile platforms.

## Reforms implemented for DBR 2019 :

-  To  reduce  the  time  taken  for  border  compliance  time,  facility  of  filing advance bill of entry (import declaration) is provided by customs
-  Enhanced facilitation through Risk Management System (Facilitated Bill of Entry)  by  simplification  of  Risk  Management  System  inspection  process resulting in reduced time taken for clearance.
-  Direct Port Delivery for import and Direct Port Entry for export is available at  Jawarlal  Nehru  Port  Trust  (JNPT)  to  allow  clearance  and  shipping  of cargo directly from port premises, thus reducing the overall dwell time for both import and export
-  Promotion  of  Authorized  Economic  Operator  (AEO)  programme:  AEO programme  seeks  to  provide  tangible  benefits  in  the  form  of  faster Customs  clearances  and  simplified  Customs  procedures  to  business entities
-  Reduction  in  paper  documentation  and  physical  copies  of  EXIM  related documents with the help of e-Sanchit; e-Sanchit, an online application on ICEGATE portal that allows a trader to submit all supporting documents for clearance of consignments electronically with digital signatures.
-  Government of India has mandated the use of e-Payment, e-Invoice and e-Delivery order by all stakeholders in maritime trade from 2nd of April.
-  Customs has implemented Electronic Sealing for Containers by exporters under self-sealing procedure; leading to faster export process
-  Infrastructure strengthening: In order to handle the rising number of cargo at  JNPT,  JNPT  has  added  15  e-RTGCs  (Rubber  Tyre  Gantry  Cars)  to improve the operational efficiency.
-  A fifth container terminal has been inaugurated at JNPT in February, 2018 which has added a capacity of 24 million TEUS (Twenty Feet Equivalent Units) at JNPT.

## (i) Enforcing Contracts:

Reforms  accepted  in  DBR  2018: India  made  enforcing  contracts  easier  by introducing the National Judicial Data Grid, which makes it possible to generate case measurement reports on local courts. This  reform  applies  to  both  Delhi and Mumbai.

Reforms  implemented  for  DBR  2019 :    Implemented  case  management system for judges and lawyers in Delhi district court & Mumbai city civil court for speedier resolution of commercial cases.

## (j) Resolving Insolvency:

Reforms accepted in DBR 2018: India  made  resolving  insolvency  easier  by adopting a new insolvency and bankruptcy code that introduced a reorganization  procedure  for  corporate  debtors  and  facilitated  continuation  of the  debtor's  business  during  insolvency  proceedings.  This  reform  applies  to both Delhi and Mumbai.

## B. Business Reform Action Plan

Under Business Reform Action Plan, 2017, DIPP has taken numerous initiatives for the reform process as listed below:

-  A nationwide workshop was held on 29 th July, 2017 to discuss the relevance and importance of implementing reforms. The all-day conference witnessed an active involvement  of  almost  100  participants  from  26  States/UTs.  The  workshop witnessed sharing of the best practices by States/UTs
-  A  unique  handholding  method  was  introduced  where  leading  States  were partnered with laggard States/UTs. West Bengal merits a special mention for its effort for conducting a 3 day workshop for Nagaland
-  Priority  reforms  was  identified  for  North  east  States  and others  with  low implementation score
-  8  workshops  were  conducted  along  with  the  World  Bank  to  address  queries posed by States/UTs in Tripura, Punjab, Haryana, Daman & Diu, Dadra Nagar Haveli, Andaman and Nicobar Islands, Goa and Karnataka
-  To handhold all the 8 north-eastern States, video conferences were arranged.

Some important achievements under the exercise are as follows:-

-  19 States have designed an Information Wizard providing information for all approvals, licenses, registrations timelines, procedure to establish business/industrial unit (pre-establishment & pre-operation)
-  21 States/UTs have designed and implemented online Single Window System
-  16 States/UTs have stipulated Construction Permits to be provided within 45 days (Building plan approval to be provided in 30 days/ Plinth level inspection to  be  completed  in  7  days,  final  occupancy  certificate  provided  in  8  days). Telangana, Assam and Tamil Nadu have mandated even shorter timelines of 29, 30 and 37 days, respectively. Tamil Nadu has claimed to have done away with the process of issuance of completion certificate
-  21 States/UTs have implemented a GIS system to provide details about the land earmarked for industrial use across the State
-  23 States/UTs have reduced the number of documents required for Obtaining Electricity connection to only 2
-  18 States/UTs have brought all compliance inspections conducted by Labour, Factories,  Boilers  Departments  and  Pollution  Control  Boards  under  Central Inspection Framework
-  16 States/UTs have establishing commercial courts at district level to resolve disputes
-  12 States/UTs have merging of the payment of court fees and process fees into a single transaction with some states like Jharkhand, Maharashtra, and Gujarat even repealing process fees from the Court Fees Act
-  29  States/  UTs  have  actioned  notifying  a  list  of  white  category  industries exempted from taking pollution clearances.
-  In  new  sector  specific  reforms  added  in  2017,  States/  UTs  have  shown  an active  participation,  with  20  States/UTs  implementing  an  online  application system  Wholesale  Drug  License  and  Retail  Drug  License  (Pharmacy),  18 States/UTs  have  online  systems  for  Registration  of  Partnership  firms  and Societies, 20 States/UTs have implemented an online system for registration and renewal under the Legal Metrology Act, 2009.

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