Lok Sabha Question No. 689 (UNSTARRED), answered on 2019-06-26
Subject: Ease of Doing Business
Ministry: COMMERCE AND INDUSTRY
Asked by: Ranjanben Dhananjay Bhatt

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

## DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

## UNSTARRED QUESTION NO. 689.

TO BE ANSWERED ON WEDNESDAY, THE 26 TH  JUNE, 2019.

## EASE OF DOING BUSINESS

## 689.   SHRIMATI RANJAN BEN DHANANJAY BHATT:

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

## वाणिज्य एवं उद्योग मंत्री

- (a) whether the Government has a proposal to improve India's ranking in ease of doing business;
- (b) if so, whether the Government proposes to take any steps in this regard; and
- (c) if so, the details thereof and if not, the reasons therefor?

## ANSWER

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

- (a) to (c): Yes,  Sir.  Department  for  Promotion  of  Industry  and  Internal  Trade (DPIIT), in coordination with Central Ministries/Departments and Governments of States/UTs, has taken several reform measures with an aim  to  improve  regulatory  environment  and  facilitate  doing  business  in India  thereby  increasing  India's  rank  in  World  Bank's  Doing  Business Report. The details of steps taken in this regard are provided in Annexure .

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## ANNEXURE

## ANNEXURE REFERRED TO IN REPLY TO PARTS (a) TO (c) OF LOK SABHA UNSTARRED QUESTION NO. 689 FOR ANSWER ON  26.06.2019.

## A. World Bank's Ease of Doing Business Assessment

-  The  World  Bank  released  the  Doing  Business  Report  (DBR),  2019  on 31 st October,  2018.  India  ranks  77  among  190  countries  assessed  by  the Doing Business Team. India has leapt 23 ranks over its rank of 100 in the DBR  2018.  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 2019 is as follows:

| S. No.     | Indicator                         | Rank       |
|------------|-----------------------------------|------------|
| 1.         | Starting a Business               | 137        |
| 2.         | Dealing with Construction Permits | 52         |
| 3.         | Getting Electricity               | 24         |
| 4.         | Registering Property              | 166        |
| 5.         | Getting Credit                    | 22         |
| 6.         | Protecting Minority Investors     | 7          |
| 7.         | Paying Taxes                      | 121        |
| 8.         | Trading Across Borders            | 80         |
| 9.         | Enforcing Contracts               | 163        |
| 10.        | Resolving Insolvency              | 108        |
| Overall 77 | Overall 77                        | Overall 77 |

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

## (i) Starting A Business:

- a)  The  minimum  capital  requirement  for  public  and  private  company  has been eliminated under the Companies (Amendment) Act, 2015.
- b)  Introduced  a  single  form  SPICe  (Simplified  Proforma  for  Incorporating Company  electronically)  by  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).
- c)  Introduced an e-form AGILE (Application for registration of the Goods and Services Tax Identification Number (GSTIN), Employees' State Insurance Corporation (ESIC) registration plus Employees' Provident Fund Organization (EPFO) registration). Any applicant, if he wants to register for any of  these  bodies,  can  fill  in  e-form  AGILE  and  get  registration  at  the time of company incorporation itself. This form enables a user to apply for GST, EPF and ESI registration with the SPICe form.
- d)  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.

- e)  Incorporation fee reduced to zero for companies with authorized capital up to INR 15 lakhs
- f) 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.
- g)  Online and common registration for EPFO & ESIC is provided on Shram Suvidha Portal.
- h)  Registrations under Mumbai Shops & Establishments Act are provided in real time without any cost and any inspection
- i) Eliminated the requirement of bank account details for GST registration

## (ii) Dealing with Construction Permits:

- a) An  online  single  window  system  has  been  introduced  in  Delhi  (By Municipal Corporations in Delhi) and Mumbai (By Municipal Corporation of Greater  Mumbai) integrating internal and external departments, removing requirement of visiting them individually.
- b) Unified building bye-laws 2016 have been introduced in Delhi.
- c) Deemed approvals  have  been  introduced  in  Delhi,  if  approvals  are  not granted within defined timelines.
- d) Risk based classification of buildings has been introduced for fast tracking building plan approval, inspection and grant of occupancy-cumcompletion certificate.
- e) Requirement of submitting notarized certificates or affidavits for building plan approval has been replaced with e-undertaking in Delhi.
- f) Multiple  inspections  at  completion  stage  have  been  replaced  by  single joint inspection in Delhi.
- g) Road cutting and restoration for water and sewer connections have been simplified.

## (iii) Getting Electricity:

- a)  Procedures for internal wiring inspection by the Electrical Inspectorate (in Delhi) have been eliminated.
- b)  In  Delhi,  service  line  charges  have  been  capped  to  INR  25,000/-  in electrified areas for Low Tension loads up to 150 KW.
- c)  Time taken by the utility to carry out external connection works has been reduced in Delhi.

## (iv) Getting Credit :

- a)  Secured  creditors  are  paid  first  during  business  liquidation,  and  hence have priority over other claims such as labor and tax.

## (v) Paying Taxes:

- a)  17  indirect  Central  and  State  taxes  have  been  replaced  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.
- b)  Corporate income tax has been reduced from 30% to 25% for companies with a turnover up to INR 250 crore.
- c)  Electronic System for payment of Social Security Contributions has been introduced enabling easier return payment.
- d)  Making payment of EPF has been made mandatory electronically.
- e)  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.

## (vi)     Trading Across Borders:

- a)  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.
- b)  Enhancement  of  risk-based  inspections  for  both  imports  and  exports, whereby only about 5% of goods are physically inspected.
- c)  Advance Bill of Entry has been adopted which allows importers to start the process of customs clearance before the arrival of the vessel.
- d)  Equipment  on  the  Nhava  Sheva  Port  in  Mumbai  has  been  upgraded  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.
- e)  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.
- f) e-Sanchit, an online application system, under the Single  Window Interface  for  Trade  (SWIFT)  has  been  implemented.  It  allows  traders  to submit all supporting documents electronically with digital signatures.

## (vii) Enforcing Contracts

- a)  National Judicial Data Grid has been introduced which makes it possible to generate case measurement report on local courts.
- b)  The  Commercial  Courts  Act  2015  has  been  amended  to  reduce  the pecuniary jurisdiction of commercial courts from INR 1 crore to INR 3 lakhs to  establish  commercial  courts  at  the  District  Level.  This  will  help  in speedier disposal of commercial disputes and reduce pendency.

## (viii) Resolving Insolvency

- a)  Insolvency and Bankruptcy Code 2016 has been adopted that introduced a reorganization procedure for corporate debtors and facilitated continuation of the debtors' business during insolvency proceedings.
- b)  Professional  institutions  have  been  established  for  effective  handling  of restructuring and insolvency proceedings.
- c)  Time-bound resolution process is done under the IBC and liquidation is the last resort.
- d)   Section 42 of the Insolvency & Bankruptcy Code 2016 has been amended to  provide  that  a  creditor  has  the  right  to  object  to  decisions  of  the liquidator accepting or rejecting claims against the debtor brought by the creditor itself and by any other creditor.

## B. Implementation of Business Reforms by States/UTs

1. The Department spearheaded a dynamic reform exercise that commenced in 2014  to  rank  all  the  States/UTs  in  the  country  based  on  implementation  of designated reform parameters.
2. The aim of  this  exercise  is  to  create  a  conducive  business  environment  by streamlining  regulatory  structures  and  creating  an  investor-friendly  business climate by cutting down red tape.
3. DPIIT also developed an online portal, which can be accessed at http://eodb.dipp.gov.in, wherein all the reforms implemented are accessible for public viewing. The portal also gives dynamic ranking which updates, as and when, any of the reform points are recognized and approved.
4. In 2017, the reform exercise was updated to 372 action points with additions introduced  such  as  Central  Inspection  system,  Trade  License,  Registration under Legal Metrology, and Registration of Partnership Firms & Societies.

## 5. Initiatives taken by DPIIT for the reform process:

- i. 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
- ii. 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
- iii. Priority  reforms  was  identified  for  North  east  States  and  others  with  low implementation score
- iv. 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
- v. To handhold all the 8 north-eastern States, video conferences were arranged.
- vi. The assessment of States/UTs under Business Reform Action Plan, 2017-18 was released jointly by DPIIT and the World Bank on 10 th July, 2018.
6.  Some important achievements under the exercise for 2017-18 are:-
- i. 19 States have designed an Information Wizard providing information for all approvals, licenses, registrations timelines, and procedure to establish business/industrial unit (pre-establishment & pre-operation).
- ii. 21  States/UTs  have  designed  and  implemented  online  Single  Window System.
- iii. 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.
- iv. 21 States/UTs have implemented a GIS system to provide details about the land earmarked for industrial use across the State
- v. 23 States/UTs have reduced the number of documents required for Obtaining Electricity connection to only 2
- vi. 18 States/UTs have brought all compliance inspections conducted by Labour, Factories,  Boilers  Departments  and  Pollution  Control  Boards  under  Central Inspection Framework
- vii. 12 States/UTs have merged 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
- viii. 29 States/ UTs have notified a list of white category industries exempted from taking pollution clearances.
- ix. 20  States/UTs  implementing  an  online  application  system  Wholesale  Drug License and Retail Drug License (Pharmacy).
- x. 18 States/UTs have online systems for Registration of Partnership firms and Societies,
- xi. 20  States/UTs  have  implemented  an  online  system  for  registration  and renewal under the Legal Metrology Act, 2009.

## 7. Business Reform Action Plan 2019 for States:-

- i. An 80 point Action Plan, 2019 has been prepared by DPIIT and shared with all the States and UTs for implementation of reforms.
- ii. As capacity building initiatives,  7  workshops  have  been  conducted in  Union Territories (Dadra & Nagar  Haveli, Delhi, Chandigarh,  Daman  &  Diu, Puducherry, Andaman & Nicobar Islands and Lakshadweep).
- iii. 8  regional  workshops  have  been  conducted  in  Lucknow  (North  Region), Kolkata (East Region), Mumbai (West Region), Bengaluru (South Region) and Guwahati (North-eastern Region).
8. District  Reform  Action  Plan:A  comprehensive 218-point  District  Reform Plan  has  been  prepared  and  shared  with  the  State  Governments  with  a request  to  implement  the  same  in  the  districts.  The  Action  Plan  is  spread across  8  areas:  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.

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