Lok Sabha Question No. 2585 (UNSTARRED), answered on 2019-12-04
Subject: Steps for Promoting Exports
Ministry: COMMERCE AND INDUSTRY
Asked by: Parvesh Sahib Singh

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 2585 TO BE ANSWERED ON 04 th DECEMBER, 2019 TO BE ANSWERED ON 04

## STEPS FOR PROMOTING EXPORTS

2585.  SHRI PARVESH SAHIB SINGH VERMA:

Will the Minister of COMMERCE & INDUSTRY ( वािण�य एवं उ�ोग मं�ी ) be pleased to state:

- (a) the details of all schemes/ interventions and steps taken by the Government for the promotion of Indian exports in the global trade;
- (b) the  details  of  reforms  undertaken  in  the  industrial  policy  for  improving  business  environment  and bringing foreign investments in India; and
- (c) the details of the steps being taken by the Government to strengthen India's manufacturing sector vis a-vis other nations with regard to better performance in Free Trade Agreements?

## ANSWER

## okf.kT; ,oa m|ksx ea=h ( Jh ih;w'k xks;y ) THE MINISTER OF  COMMERCE AND INDUSTRY (SHRI PIYUSH GOYAL)

- (a) Sir, the Government has been implementing various steps such as exemption/ refund of duties, support to merchandise exports to offset logistics costs, infrastructure support to States etc. to promote Indian exports. The key interventions include:
- i. A new Foreign Trade Policy (FTP) 2015-20 was launched on 1st April 2015. The policy, inter alia,  rationalised  the  earlier  export  promotion  schemes  and introduced two new schemes, namely Merchandise Exports from India Scheme (MEIS) for improving export of goods   and 'Services Exports from India Scheme (SEIS)' for increasing exports of services. Duty credit scrips issued under these schemes were made fully transferable. In the Mid-term Review of the FTP in December,  2017,  incentive  rates  for  labour  intensive  /  MSME  sectors  were increased  across  the  board  by  2%  with  an  annual financial  implication  of  Rs 8,450 cr.
- ii. A  new  Logistics  Division  was  created  in  the  Department  of  Commerce  to coordinate integrated development of the logistics sector.  India's rank in World Bank's Logistics Performance Index moved up from 54 in 2014 to 44 in 2018.
- iii. Interest Equalization Scheme on pre and post shipment rupee export credit was introduced  from  1.4.2015  providing  interest  equalisation  at  3%  for  labour intensive / MSME sectors. The rate was increased to 5% for MSME sectors with effect from 2.11.2018 and merchant exporters were covered under the scheme with effect from 2.1.2019.
- iv. Various measures for improving ease of doing business were taken. India's rank in World Bank 'Ease of doing business' ranking improved from 142 in 2014 to 63 in 2019 with the rank in 'trading across borders' moving up from 122 to 80.
- v. A  new  scheme  called  'Trade  Infrastructure  for  Export  Scheme  (TIES)'  was launched with effect from 1st April 2017 to address the export infrastructure gaps in the country.
- vi. A comprehensive 'Agriculture Export Policy' was launched on 6th December, 2018 with an aim to double farmers' income by 2022 and provides an impetus to agricultural exports.
- vii. A new scheme called 'Transport and Marketing Assistance' (TMA) has been launched for mitigating disadvantage of higher cost of transportation for export of specified agriculture products.
- viii. A new scheme called Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) covering export of garments and made-ups was notified on 7.3.2019 providing refund of duties/taxes at higher rates.
- ix. Through  the Market  Access Initiative (MAI) Scheme,  reimbursement  of expenditure  incurred  by  Indian  exporters  on  meeting  statutory  compliances abroad is provided, under which the limit cap per exporter has recently been increased from Rs 50 Lacs to Rs 2 Cr  per year.
- x. As  regards  steps  taken  to  engage  the  States  in  export  promotion,  the  State Governments have been requested to nominate a Senior Officer as the Export Commissioner who can coordinate all export efforts, required from the different agencies of the State Government.

(b)  and  (c)  Government  is  continuously  engaged  in  strengthening  Indian  industry through 'Ease of Doing Business'  reforms and policy interventions for improved market access, attracting foreign investments and better utilization of Free Trade Agreements. Regulatory environment impacts business development. Due to low regulatory burden entrepreneurs can devote their time on core productive activities. It also leads to lower costs for  compliance as the requirement of engaging regulatory experts is reduced. Some steps taken for improving business environment and boosting the manufacturing sector in the recent past are detailed in the Annexure.

## ANNEXURE

## REFERRED TO IN REPLY TO PART (b) & (c) OF LOK SABHA UNSTAR RED QUESTION NO. 2585 FOR ANSWER ON 04.12.2019

- i. The World Bank released the Doing Business Report (DBR), 2020 on 24 th October, 2019. India ranks 63 rd amongst 190 countries as per assessment made by the Doing Business Team. India has leapt 14 ranks from its rank of 77 in the DBR 2019. The DBR is an assessment of 190 economies and covers 10 indicators which span the lifecycle of a business. The indicator wise rank of India in World Bank's DBR 2020 is as follows:

| S. No.     | Indicator                         | Rank       |
|------------|-----------------------------------|------------|
| 1.         | Starting a Business               | 136        |
| 2.         | Dealing with Construction Permits | 27         |
| 3.         | Getting Electricity               | 22         |
| 4.         | Registering Property              | 154        |
| 5.         | Getting Credit                    | 25         |
| 6.         | Protecting Minority Investors     | 13         |
| 7.         | Paying Taxes                      | 115        |
| 8.         | Trading Across Borders            | 68         |
| 9.         | Enforcing Contracts               | 163        |
| 10.        | Resolving Insolvency              | 52         |
| Overall 63 | Overall 63                        | Overall 63 |

India  has  improved  its  rank  in  7  out  of  10  indicators  and  has  moved  closer  to international best practices. The 2020 edition of the Report acknowledges India as one of the top 10 improvers, third time in a row, with an improvement of 67 ranks in three years. It is also the highest jump by any large country since 2011. 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 With applicability in both Delhi and Mumbai, India made starting  a  business  easier  by  abolishing  filing  fees  for  the  SPICe  company incorporation  form,  electronic  memorandum  of  association,  and  articles  of association.
- b. Dealing with construction permits In Delhi, obtaining construction permits was made easy, thereby reducing the time and cost of obtaining construction permits, and building quality control was improved by strengthening professional certification  requirements.  Mumbai  streamlined  the  process  of  obtaining  a building permit and reduced costs of scrutiny fees by 90%. The introduction of these reforms resulted in a jump of 25 ranks from 52 last year to 27 in DBR 2020. Also, the Distance to Frontier improved from 73.81 to 78.7.
- c. Trading across borders Trading across borders was made easier by enabling post-clearance  audits,  integrating  trade  stakeholders  in  a  single  electronic platform, upgrading port infrastructure, and enhancing the electronic submission of documents. This reform is applicable to both Delhi and Mumbai.
- d. Resolving insolvency India's rank in resolving insolvency improved from 108 to 52 recording a jump of 56 ranks with the Distance to Frontier improving from 40.84 to 62.0. India made resolving insolvency easier by promoting reorganization proceedings in practice. The Insolvency and Bankruptcy Code 2016 has been recognized as a mode of resolving insolvency. Also, time taken in resolving insolvency is now comparable to OECD Countries.
- ii. Other  initiatives  for  improving  business  environment  and  boost  the  manufacturing sector year-wise are:
- a. 2014: The Department for Promotion of Industry and Internal Trade (DPIIT) in consultation  with  the  State  Governments  started  a  comprehensive  reform exercise in  December,  2014  to  create  a  conducive  business  environment  by streamlining  regulatory  structures  and  creating  an  investor friendly  business climate by cutting down red tape.
- b. 2015: A 285 point State Reform Action Plan action plan was finalized and shared with States/UTs. The World Bank also partnered with DPIIT in this reform plan and  to  give  the  exercise  momentum,  and  conducted  18  workshops  to  help Departments concerned across States/UTs to understand the essence of the reforms better. States were evaluated on implementation of these reforms and first  ever  ranking  of  States/UTs  on  Ease  of  Doing  Business  was  released  in September, 2015. The findings of the evaluation were compiled in a report titled 'Assessment of State implementation of Business Reforms'
- c. 2016: In 2016, DPIIT, in consultation with all States/UTs, released a 340 -point action  plan  which  included  recommendations  on  58  regulatory  processes, policies and process spread across 10 reform areas spanning the lifecycle of a typical  business. The  States  were  requested  to implement the reforms action plan and submit their responses for evaluation. The final ranking of States/UTs was released on 31st October, 2016 with a national implementation average of 48.93%, which was higher than national average of 32% in 2015. The reform exercise in 2016 saw larger participation and 12 States achieving greater than 90% implementation score.
- d. 2017-18: In 2017, the reform exercise featured 372 action points with additions like  Central  Inspection  system,  online  systems  for  acquiring  trade  license, registrations under Legal Metrology Act, 2009, and registration of Partnership Firms & Societies. The assessment for the year 2017-18 was released jointly by DPIIT and the World Bank on 10 th July, 2018. 18 States recorded implementation score of 80% and above - these states account for majority of the total area and GDP of the country. Some important achievements under this reform exercise were as follows:
- i. 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)
- ii. 21 States/UTs have designed and implemented online Single Window System
- iii. 21  States/UTs  have  implemented  a  Geographical  Information  System (GIS) system to provide details about the land earmarked for industrial use across the State
- iv. 23  States/UTs  have  reduced  the  number  of  documents  required  for Obtaining Electricity connection to only two.
- v. 8  States/UTs  have  brought  all  compliance  inspections  conducted  by Labour,  Factories,  Boilers  Departments  and  Pollution  Control  Boards under Central Inspection Framework.
- vi. 29 States/ UTs have notified a list of white category industries exempted from taking pollution clearances.
- e. 2019: An 80 reform point action plan for the year 2019 was shared with States and  UTs  for  implementation  of  reforms  by  15.06.2019. An  important  change introduced in the action plan for the year 2019 is that the assessment is based only on the feedback received from users and industries.  Further, a 218 point District Reform Action Plan which is spread across 8 areas which are  Starting a Business  for  Construction,  Urban  Local  Body  Services,  Paying  Taxes,  Land Reform  Enabler,  Land  Administration  and  Property  Registration  Enablers, Obtaining Approval, Miscellaneous and Grievance Redressal/ Paperless Courts and Law & Order has been prepared for targeted action. The District reform plan covers 43 NoCs/ Permissions/ Registrations/ Certificates which will ease doing business in sectors like retail, education, health, food and beverages, real estate, gems and jewelry, mining and entertainment. A suggested questionnaire for the feedback for States/UTs has also been shared with the States.  Such questionnaire will assess implementation of the Plan by District level functionaries  and  effectiveness  of  utilization  of  online  systems,  adherence  to mandated  timelines  and  lack  of  physical  touch-points  between  applicant  and department/agency. States/UTs are encouraged to participate in this reform and take onus to conduct the feedback exercise in Districts.

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