Lok Sabha Question No. 586 (UNSTARRED), answered on 2019-11-20
Subject: Ease of Doing Business
Ministry: COMMERCE AND INDUSTRY
Asked by: Heena Vijaykumar Gavit, Shrirang Appa Barne, Vinayak Bhaurao Raut, Sougata Ray, Hemant Patil, DNV Senthilkumar. S.

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

UNSTARRED QUESTION NO. 586. TO BE ANSWERED ON WEDNESDAY, THE 20 TH  NOVEMBER, 2019.

## EASE OF DOING BUSINESS

## 586.   DR. HEENA GAVIT:

SHRI SHRIRANG APPA BARNE: SHRI VINAYAK RAUT: PROF. SAUGATA RAY: SHRI HEMANT SRIRAM PATIL: DR. DNV SENTHILKUMAR S.:

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

वाणिज्य

## एवं उद्योग मंत्री

- (a) whether India has jumped 14 places to rank 63rd on the World Bank's 'Ease of Doing Business' 2020 recently and if so, the details thereof;
- (b) the details of the factors responsible for improved ranking;
- (c) the  steps  taken  to  foster  market-oriented  development  and  broad-based growth in each of the sectors;
- (d) whether the Government considers the said ranking as a criterion for tangible progress of the country and if so, the details thereof;
- (e) the details of the sectors that are lagging and need improvement for further improving India's ranking;
- (f) whether the Union Government has sought the help of States for working in the lagging sector to further improve the ranking and if so, the details thereof and the response of each of the State Governments;
- (g) whether the Government is targeting to join the club of top 50 economies on the Ease of Doing Business ranking in the coming years; and
- (h) if so, the steps taken by the Government to achieve the target?

## ANSWER

## वाणिज ् य एवं उद्योग मंत्री ( श्री पीयूष गोयल ) THE MINISTER OF COMMERCE & INDUSTRY (SHRI  PIYUSH GOYAL)

Yes, Sir. In the latest Doing Business Report (DBR), 2020 released by the World Bank on 24 th October, 2019, India stands at 63 rd position out

- (a) to (d):

of  190  countries,  registering  a  jump  of  14  places  from  its  last  year's rank.  The  details  are  at  Annexure.  Under  Ease  of  Doing  Business initiative, business processes are made simpler through which informal sectors  are  formalized.  These  efforts  attract  investments  from  other countries which in turn lead to more jobs in the country.

- (e): India's  rank  in  the  indicators  Paying  Taxes,  Starting  a  Business, Registering Property and Enforcing Contracts need further improvement. Department for Promotion of Industry and Internal Trade (DPIIT)  is  closely  working  with  the  concerned  Ministries/Departments and Governments of Maharashtra and NCT of Delhi to implement the reforms and improve the ranking in these indicators.
- (f): The Union Government has been working in unison with the Governments  of  Maharashtra  and  NCT  of  Delhi  in  implementing  the reforms  and  improve  the  rankings.  The  reform  measures  to  be implemented in all the sectors related to the Govt. of Maharashtra and NCT  of  Delhi  has  been  shared  with  them.  The  response  has  been forthcoming  which  can  be  seen  from  the  fact  that  India  recorded highest improvement (67 rank) in 3 years by any large country since 2011.  India  has  also  been  recognized  in  top  ten  countries  with  most reforms  undertaken  for  3  consecutive  years  under  Doing  Business 2020.
- (g) & (h): Yes, Sir. DPIIT has, in coordination with Central Ministries/Departments and Governments of States/UTs, taken several steps to improve regulatory environment in India during last three years with  an  aim  to  bring  India  within  top  50  ranks.  Several  business regulatory  processes  have  been  streamlined  across  the  business lifecycle. As a result of the efforts made by the Government, India has improved its rank from 77 th in DBR, 2019 to 63 rd in DBR, 2020, with an improvement of 14 ranks during the last year.

ANNEXURE  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (d)  OF  THE  LOK SABHA UNSTARRED QUESTION NO. 586 FOR ANSWER ON 20 TH  NOVEMBER, 2019.

The indicator-wise rank of India as the DBR, 2020 is given as under:

| Sl. No.   | Indicator                         |   Rank (DBR 2020) |
|-----------|-----------------------------------|-------------------|
| 1         | Protecting Minority Investors     |                13 |
| 2         | Getting Electricity               |                22 |
| 3         | Getting Credit                    |                25 |
| 4         | Dealing with Construction Permits |                27 |
| 5         | Resolving Insolvency              |                52 |
| 6         | Trading across Borders            |                68 |
| 7         | Paying Taxes                      |               115 |
| 8         | Starting a Business               |               136 |
| 9         | Registering Property              |               154 |
| 10        | Enforcing Contracts               |               163 |
|           | Overall Score                     |                63 |

Significant improvements  have been  registered  in resolving  insolvency,  dealing with  construction  permits,  registering  property,  trading  across  borders  and paying taxes indicators .  Some of the major indicator wise reforms undertaken by the  Government  towards  easing  the  business  environment  in  the  country  are  as under:

## i) 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 is recognized as a mode of resolving insolvency. Also, time taken in resolving insolvency is now comparable to OECD Countries.

## ii)  Dealing with construction permits

In  Delhi,  obtaining  construction  permits  was  made  easy  by  reducing  the  time  and cost  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.

## iii) Trading across borders

Another  area  which  saw  significant  improvement  was  trading  across  borders indicator which saw a jump of 12 places. From 80th place in 2018, India stands at 68th  place  in  2019.  Trading  across  borders  was  made  easier  by  enabling  postclearance  audits,  integrating  trade  stakeholders  in  a  single  electronic  platform, upgrading  port  infrastructure,  and  enhancing  electronic  submission  of  documents. This reform is applicable to both Delhi and Mumbai.

## iv) Paying Taxes:

-  Paying taxes has been made easier by replacing many indirect taxes with a single indirect tax, Goods and Service Tax (GST), for the entire country. The previous sales taxes including the central sales tax, CENVAT, state VAT and service tax have been merged into the GST. Unification of these taxes will reduce the cascading effect of taxes and make taxes paid on inputs creditable to a higher percentage.
-  Corporate  income  tax  has  been  reduced  from  30%  to  25%  for  companies  with  a turnover up to INR 250 crores
-  Administrative charges on The Employees' Provident Funds Scheme, 1952 (EPFS) have been reduced in March, 2017 from 0.85% to 0.65% of the monthly pay. The Employees' Deposit Linked Insurance (EDLI) administrative charges of 0.01% have been removed.
- v)  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.

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