Lok Sabha Question No. 5718 (UNSTARRED), answered on 2022-04-06
Subject: Ease of Doing Business
Ministry: COMMERCE AND INDUSTRY
Asked by: N.K. Premachandran

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

## DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE LOK SABHA

UNSTARRED QUESTION NO. 5718.

TO BE ANSWERED ON WEDNESDAY, THE 6 TH  APRIL, 2022.

## EASE OF DOING BUSINESS

## 5718.  SHRI N.K. PREMACHANDRAN:

## Will the Minister of COMMERCE AND INDUSTRY be pleased to state: वाणिज्य एवं उद्योग मंत्री

- (a) whether the Government proposes to initiate action to attract investors and if so, the details of the action taken thereon;
- (b) whether the Government has relaxed the exiting provisions of law for ease of doing business and if so, the details of action taken thereon;
- (c) whether the Government has initiated action for legislative support for ease of doing business and if so, the details thereof;
- (d) whether the Government has given incentives to the Corporates for ease of doing business and if so, the details thereof;
- (e) whether  the  Government  has  exempted  the  provisions  of  environmental protection laws for ease of doing business and if so, the details thereof;
- (f) the details of the reforms of the Government for ease of doing business; and
- (g) whether  the  Government  has  amended  the  Labour  Laws  for  ease  of  doing business and if so, the details thereof?

## ANSWER

## वाणिज्य एवं उद्योग मंत्रालय में राज्य मंत्री ( श्री सोम प्रकाश ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI SOM PARKASH)

- (a): Department for Promotion of Industry and Internal Trade (DPIIT) is the Nodal Department for coordinating the initiatives under Ease of Doing Business which are aimed at creating a conducive business environment. In addition to ongoing schemes of various Departments and Ministries, Government has taken various steps to boost domestic and  foreign  investments  in  India.  These  include  the  introduction  of Goods and Services Tax, reduction in Corporate taxes, financial market reforms, consolidation of public sector banks, enactment of four labour codes,  Foreign  Direct  Investment  (FDI)  policy  reforms,  reduction  in compliance burden, policy measures to boost domestic manufacturing

through public procurement orders, Phased Manufacturing Programme, to name a few.

To promote FDI in  the  country,  the  Government  has  put  in  place  an investor-friendly policy, wherein most sectors except certain strategically important  sectors  are  open  for  100%  FDI  under  the  automatic  route. Further, the policy on FDI is reviewed on an ongoing basis, to ensure that India remains attractive and investor friendly destination. Changes are  made  in  the  policy  after  having  consultations  with  stakeholders including  apex  industry  chambers,  associations,  representatives  of industries/groups and other organizations.

- (b) & (c): Department of Justice (DoJ) and Department of Legal Affairs (DoLA) have taken following measures for timely disposal of commercial cases which promote Ease of doing Business:
- i. The Commercial Courts Act, 2015, amended in 2018, provides for the  constitution  of  Commercial  Courts  at  the  district-level  and Commercial Division in all High Courts. To streamline their functioning,  the  pecuniary  value  of  commercial  cases  has  been reduced to Rs. 3 lakh from earlier Rs. 1 crore.
- ii. Designated Special Courts for hearing Infrastructure projects-related disputes  have  been  set  up  in  23  High  Courts  alongwith  Special Commercial  Benches  in  High  Courts  for  dealing  with  high  value commercial disputes i.e. above Rs. 500 crores, that have been set up in 8 High Courts.
- iii. Alternate  Dispute  Resolution  Mechanism  by  way  of  Pre-Institution Mediation & Settlement (PIMS) has been provided in the Act as an opportunity to the parties to resolve commercial disputes outside the ambit of the courts.
- iv. The Act mandates holding of Case Management Hearing (Pre-Trial Conference) to complete the trial in a time bound manner.
- v. Commercial  cases  are  randomly  and  automatically  assigned  to Judges using Case Information System (CIS) software eliminating human intervention, thus, enhancing judicial transparency. To ensure compliance of three adjournment rule, a facility of colour banding in CIS software has been created which provides information regarding the number of adjournments per case.
- vi. Electronic filing of commercial cases (E-Filing) has been operationalised  in  most  Commercial  Courts.  Electronic  service  of Summons (E-Summons) of commercial cases has been operationalised in few commercial courts which reduces the delay in sending  summons  to  parties.  Electronic  Case  Management  Tools (ECMT) for Judges and Advocates have been integrated into one single  CIS  Software,  which  has  enhanced  judicial  productivity. Dedicated websites have been started for Commercial Courts.
- vii. The  Commercial  Courts  (Statistical  Data)  Rules,  2018  has  been notified for making available detailed data points on various aspects of commercial cases for effective monitoring of time taken in case disposal by these courts.
- (d): Ministry of Corporate Affairs (MCA) has undertaken a number of steps to boost ease of doing business, which are as under:-
- (i) A single integrated new web form called SPICe+ along with AGILE PRO-S has been deployed. This form provides eleven services related to 'starting a business' namely (i) Name Reservation, (ii) Incorporation,  (iii)  Permanent  Account  Number  (PAN),  (iv)  Tax Deduction  Account  Number  (TAN),  (v)  Director  Identification Number  (DIN),  (vi)  Employees'  Provident  Fund  Organisation (EPFO) Registration, (vii) Employees' State Insurance Corporation  (ESIC)  Registration,  (viii)  Goods  and  Services  Tax (GST)  number,  (ix)  Bank  Account  Number,  (x)  Profession  Tax Registration (Mumbai, Kolkata and Karnataka), (xi) Delhi Shops and Establishment Registration.
- (ii) Zero fee is  now charged for incorporation of all companies with authorized  capital  up  to  Rs.  15  lakh  or  with  up  to  20  members where no share capital is applicable.
- (iii) A Central Registration Centre (CRC) has been set up for name reservation  and  incorporation  of  companies  &  Limited  Liability Partnership (LLP) within 1 day.
- (iv) The  LLP  Incorporation Form  called FiLLiP has also been integrated with Central Board of Direct Taxes (CBDT) to provide PAN/TAN at the time of Incorporation of LLP itself.
- (v) The  Companies  (Incorporation)  Third  Amendment  Rules,  2020, now provide for extension of reservation of name through a simple web service available at www.mca.gov.in.
- (vi) Provisions  with  regard  to  incorporation  and  functioning  of  OnePerson Companies (OPCs) have been revised so as to incentivize incorporation  of OPCs.  Now,  Non-Resident  Indians  (NRIs)  are also  allowed  to  incorporate  OPCs.   OPCs  are  now  allowed  to convert into private or public companies at any point of time. The restrictions with regard to maximum amount of paid-up capital and turnover for OPCs have also been removed.
- (e): Ministry of Environment, Forest and Climate Change (MoEFCC) has not exempted any provisions of environmental protection laws for ease of doing business, however the Ministry has taken various reforms for ease of doing business as mentioned below:
- (i) Environment clearances made  faster while taking care of environment:
- a. Environmental  clearances  (EC)  processes  simplified  for activities including  EC  for  new  projects,  expansion  of

existing projects, capacity expansion, change of product mix etc. through PARIVESH portal leading to reduced issuance time for businesses.

- b. Application process  for  EC  transfer  made  online  and frequency of EAC meeting increased (bi-monthly) for speedy clearances.
- c. Exempted prior environmental clearance in case of change of  product  mix,  raw  material  etc.  provided  there  is  no increase in pollution load and extended validity of environmental clearance to 7 years.
3. (ii) Compliance  made  easy  for  businesses  engaged  with  Ozone depleting substances:

Simplified  compliance  provisions  across  manufacture/  import/ export  of  compressors,  production/  sale  of  ozone  depleting substances etc. by instituting one-time registration under Ozone Depleting Substance (Regulation and Control) Rules, 2000 and migrating all returns and filings (6 annual and 4 quarterly) online.

- (iii) Freedom  provided  to  businesses  in e-waste  and  fly  ash management:

Eliminated  requirement  of  separate  account  for  fly  ash  sale proceeds and use of proceeds for infrastructure development to provide greater operational flexibility to thermal power plants.

- (iv) Under provisions of The Water (Prevention & Control of Pollution)  Act,  1974  and  The  Air  (Prevention  &  Control  of Pollution) Act 1981, following steps have been taken to ensure uniformity and ease of doing business:
- a. Online consent management system has been introduced for grant of Consent to Operate and Consent to Establish.
- b. The  Central  Pollution  Control  Board  has  categorized industries  as  Red,  Orange,  Green  and White,  based  on pollution potential and frequency of renewal of consent has been  linked  with  the  category  to  ease  out  the  burden. Timeline  for  renewal  of  consent  is  5  years  for  Red,  10 years  for  Orange,  and  15  years  for  Green  category industries. White  category  industries  are  exempted  from Consent.
- (f): DPIIT, in coordination with Central Ministries/Departments, States and Union Territories (UTs), has spearheaded various reforms to improve business regulatory environment in the country. On the lines of annual assessment  done  by  the  World  Bank  for  its  Doing  Business  Report, DPIIT undertakes a dynamic reform exercise called Business Reforms Action Plan, which ranks all the States and UTs in the country based on implementation  of  designated  reform  parameters.  The  focus  of  the

reforms has been on streamlining the existing regulations and processes and eliminating unnecessary requirements and procedures. The Action Plan  covers  number  of  reform  areas  such  as  Investment  Enablers, Online  Single  Window  System,  Land  administration  and  Transfer  of Land and Property, Construction Permits Enablers, Labour Regulation Enablers,  Environment  Registration  Enablers,  Inspection  Enablers, Paying Taxes, Obtaining Utility Permits, etc.

DPIIT coordinates with Ministries/Departments and States/UTs also for initiatives to  reduce  compliance  burden  on  citizen  and  business activities. The key focus areas of the initiative are:

- (i) Simplification  of  procedures  related  to  applications,  renewals, inspections, filing records, etc.,
- (ii) Rationalization by repealing, amending or subsuming redundant laws,
- (iii) Digitization by creating online interfaces eliminating manual forms and records, and
- (iv) Decriminalization of minor technical or procedural defaults
- (g): Ministry of Labour and Employment (MoLE) has taken several initiatives towards simplification of Labour Laws for ease of doing business. The Government has enacted the four Labour Codes, namely, the Code on Wages, 2019; the Industrial Relations Code, 2020; the Code on Social Security,  2020  and  the  Occupational  Safety,  Health  and  Working Conditions Code, 2020 after simplification, amalgamation and rationalization  of  29  Central  Labour  Laws.  These  codes have  not yet come into force.

In  order  to  ensure  transparency  and  accountability  in  enforcement  of labour  laws  and  to  catalyze  ease  of  doing  business  and  creation  of employment opportunities, the codification has made the existing labour laws  in  sync  with  the  emerging  economic  scenario  and  technological advancements; reduced the complexity by providing uniform definitions; simplified the process of registration and licensing, filling of returns and maintaining registers and forms, and also, reduced multiple authorities under various Acts.

Through Labour Codes, provisions have been made for one registration for an establishment instead of multiple registrations, one license and one return in place of multiple license and returns.

In  addition,  Shram  Suvidha  Portal  (SSP)  is  a  major  technological initiative of MoLE that aims at enhancing ease of doing business and reducing the complexities related to compliance of labour laws.

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