Lok Sabha Question No. 1842 (UNSTARRED), answered on 2018-12-21
Subject: Economic Reforms
Ministry: FINANCE
Asked by: KIRIT PREMJIBHAI SOLANKI

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 1842

## TO BE ANSWERED ON DECEMBER 21, 2018

## ECONOMIC REFORMS

1842. DR. KIRIT  P. SOLANKI:

Will the Minister of FINANCE be pleased to state:

- (a) the details of  the  economic reforms undertaken  by  the Government in pursuance of the initiative of ease of doing business in this country;
- (b) the new opportunities offered to the MNCs in furtherance thereof;
- (c)  whether  the  Government  has  put  in  place  any  mechanism  to  keep  track  of  each such single reform and if so, the details thereof; and
- (d) whether the Government has undertaken advanced planning to reach a certain milestone by the end of 2030 and if so, the details thereof ?

## ANSWER

## THE MINISTER OF STATE FOR FINANCE (SHRI PON RADHAKRISHNAN)

(a)  to  (d)  Government  of    India,    in  partnership  with  State  Governments,    has undertaken a number of reforms both at Central and State level to improve the Ease of Doing Business in the country,  which are  given at Annexure. The reforms undertaken by the Government are beneficial to all businesses in general. As improvements in the business environment is a continued process, no specific target has been fixed to reach a  certain  milestone  by  the  end  of  2030.  Government  is,  however,  working  towards removing obstacles in the smooth functioning of businesses. Department of  Industrial Policy and Promotion (DIPP) monitors implementation of reforms identified for improving India's rank in the World Bank's Doing Business Report. India has improved its rank by 65 places from 142 to 77 in last 4 years since 2014. DIPP has a State level Business  Reforms  Action  Plan  online  portal  at  (http://eodb.dipp.gov.in)  on  which  all reforms carried out by the State Governments can be accessed.

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## ANNEXURE REFERRED TO IN REPLY TO PARTS (a) to (d) OF THE LOK SABHA UNSTARRED QUESTION NO.1842 DUE FOR ANSWER ON 21.12.2018.

Some of the steps taken by the Government to improve the Ease of Doing Business in the Country are given below:

## (a) Starting A Business:

-  Starting  a  business  has  been  made  faster  by  introducing  a  single  form  SPICe (Simplified  Proforma  for  Incorporating  Company  electronically)  and  merging  five different  applications  in  it  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.
-  Launch  of  a  new  and  simplified  web  based  service  i.e.  R.U.N.  (Reserve  Unique Name) for reserving a name. This has also removed the requirement to use a Digital Signature Certificate (DSC) during name reservation.
-  The  requirement  to  issue  a  physical  PAN  card  has  been  eliminated.  Additionally, PAN  and  TAN  are  mentioned  in  the  Certificate  of  Incorporation  (CoI)  which  is considered as a sufficient proof for PAN and TAN.
-  Common  registration  for  EPFO  &  ESIC  is  provided  on  Shram  Suvidha  Portal  in Mumbai.
-  Registrations  under  Mumbai  Shops  &  Establishments  Act  are  provided  instantly without any physical inspection.

## (b) Dealing with Construction Permits:

-  The process of obtaining a building permit has been streamlined and made faster and less expensive to obtain a construction permit.
-  Implementing  an  online  system  that  has  streamlined  the  process  of  obtaining building permit at the Municipality of New Delhi and Municipality of Greater Mumbai.
-  It  also  improved  building  quality  control  by  introducing  decennial  liability  and insurance.

## (c) Getting Electricity:

-  In Delhi, service line charges have been capped to INR 25,000/- in electrified areas for Low Tension loads up to 150 KW.
-  Time taken by the utility to carry out external connection works has been reduced.

## (d) Access to credit :

-  Access to credit has been strengthened by amending its insolvency law. The new amendment  in  the  Insolvency  and  Bankruptcy  Code  (Amendment)  Act,  2018 establishes  that  secured  creditors  are  paid  first  during  business  liquidation,  and hence have priority over other claims such as labour and tax.

## (e) 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 the  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.

## (f) Trading Across Borders:

-  The time and cost to export and import has been reduced through various initiatives, including the implementation of electronic sealing of containers, upgradation of port infrastructure  and  allowing  electronic  submission  of  supporting  documents  with digital signatures.
-  Enhancement of risk-based inspections for both imports and exports, whereby only about 5% of goods are physically inspected.
-  Adoption of the Advance Bill of Entry which allows importers to start the process of customs clearance before the arrival of the vessel.
-  Upgrading  equipment  on  the  Nhava  Sheva    Port  in  Mumbai  by  adding  15  new Rubber Tyre Gantry Cranes. The Phase 1 of  the Fourth Container Terminal at the Jawaharlal Nehru Port Trust, with an additional annual capacity of 2,400,000 TEUs, was completed in February 2018.
-  The new container terminal, Adani CMA Mundra Terminal Private Limited has been fully  operational  since  June  2017,  with  an  additional  annual  capacity  of  1,300,000 TEUs.
-  Implemented  in  April  2018,  e-Sanchit  is  an  online  application  system,  under  the Single  Window  Interface  for  Trade  (SWIFT)  that  allows  traders  to  submit  all supporting documents electronically with digital signatures.