Lok Sabha Question No. 169 (STARRED), answered on 2015-07-31
Subject: Ease of Doing Business
Ministry: COMMERCE AND INDUSTRY
Asked by: SUPRIYA SADANAND SULE, HEENA VIJAYKUMAR GAVIT

**GOVERNMENT OF INDIA**

**MINISTRY OF COMMERCE & INDUSTRY**

**DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION**

**LOK SABHA**

**STARRED QUESTION NO. 169.**

**TO BE ANSWERED ON FRIDAY, THE 31** **ST** **JULY, 2015.**

**EASE OF DOING BUSINESS**

***169. 	SHRIMATI SUPRIYA SULE:**

**DR. HEENA VIJAYKUMAR GAVIT:**

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

**वाणिज्‍य एवं उद्योग मंत्री**

1. the country's ranking in 'Ease of Doing Business' in the world at present;

1. whether the Government has initiated an extensive survey on 'Ease of Doing Business' in States with an objective to improve the business climate and if so, the details thereof;

1. whether online single window has been launched at Central and State levels, so as to rationalize and simplify the business regulation and if so, the details thereof; and

1. the other measures taken/proposed to be taken by the Government to boost business regulatory environment in the country and improve country's ranking on Ease of Doing Business?

**ANSWER**

**वाणिज्‍य एवं उद्योग राज्‍यमंत्री (स्‍वतंत्र प्रभार)(श्रीमती निर्मला सीतारमण)**

**THE MINISTER OF STATE (INDEPENDENT CHARGE)**

**OF THE MINISTRY OF COMMERCE & INDUSTRY**

**(SHRIMATI NIRMALA SITHARAMAN)**

(a) to (d):  	A statement is laid on the Table of the House.

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**STATEMENT REFERRED TO IN REPLY TO PARTS (a) to (d) OF THE LOK SABHA STARRED QUESTION NO. 169 FOR ANSWER ON 31.07.2015.**

1. World Bank conducts an annual study on regulatory environment across 189 countries.  In this Doing Business Report for 2015 India ranks at 142 nd .

1. Yes, Madam.  A 98 point action plan for improving the regulatory environment was shared with the States and Union Territories.  A detailed questionnaire containing 285 questions based on this action plan was also shared with the States and Union Territories.  The States and Union Territories which have responded to these questionnaires are given at Annexure ‘A’.  States have given their responses on the questionnaire.  These responses are being validated by the Department of Industrial Policy and Promotion’s team for ranking the States.

1. In order to promote rationalization and simplification of business regulations in the country an online single window was launched and 14 services of Central Government have been integrated with e-Biz portal (www.ebiz.gov.in) as per the details given at Annexure ‘B’.   Further, 24 State services of 10 States have been identified in the pilot phase are given at Annexure ‘C’.

1. The other measures taken by the government to boost the business regulatory environment in the country and improve country’s ranking on Ease of Doing Business are given at Annexure ‘D’.

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**ANNEXURE - A**

**ANNEXURE REFERRED TO IN REPLY TO PART (b) OF THE LOK SABHA STARRED QUESTION NO. 169 FOR ANSWER ON 31.07.2015.**

**States/UTs responded to the questionnaire**

| **States/UTs responded**   |                          |    | **States/UTs  Not responded**   |                        |
|----------------------------|--------------------------|----|---------------------------------|------------------------|
|                            | Andhra Pradesh           |    |                                 | Arunachal Pradesh      |
|                            | Assam                    |    |                                 | Goa                    |
|                            | Bihar                    |    |                                 | Jammu and Kashmir      |
|                            | Chhattisgarh             |    |                                 | Manipur                |
|                            | NCT of Delhi             |    |                                 | Meghalaya              |
|                            | Gujarat                  |    |                                 | Mizoram                |
|                            | Haryana                  |    |                                 | Uttarakhand            |
|                            | Himachal Pradesh         |    |                                 | Chandigarh             |
|                            | Jharkhand                |    |                                 | Dadra and Nagar Haveli |
|                            | Karnataka                |    |                                 | Daman and Diu          |
|                            | Kerala                   |    |                                 | Lakshadweep            |
|                            | Madhya Pradesh           |    |                                 |                        |
|                            | Maharashtra              |    |                                 |                        |
|                            | Nagaland                 |    |                                 |                        |
|                            | Odisha                   |    |                                 |                        |
|                            | Punjab                   |    |                                 |                        |
|                            | Rajasthan                |    |                                 |                        |
|                            | Sikkim                   |    |                                 |                        |
|                            | Tamil Nadu               |    |                                 |                        |
|                            | Telangana                |    |                                 |                        |
|                            | Tripura                  |    |                                 |                        |
|                            | Uttar Pradesh            |    |                                 |                        |
|                            | West Bengal              |    |                                 |                        |
|                            | Andaman & Nicobar Island |    |                                 |                        |
|                            | Puducherry               |    |                                 |                        |

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**ANNEXURE -  B**

**ANNEXURE REFERRED TO IN REPLY TO PART (c) OF THE LOK SABHA STARRED QUESTION NO. 169 FOR ANSWER ON 31.07.2015.**

**List of 14 Central Government services**

|   **S. No.** | **Ministry/ Dept. Name**                      | **Service  Name**                                       |
|--------------|-----------------------------------------------|---------------------------------------------------------|
|            1 | Ministry of Corporate Affairs                 | Name Availability                                       |
|            2 | Ministry of Corporate Affairs                 | Director Identification Number                          |
|            3 | Ministry of Corporate Affairs                 | Certificate of Incorporation                            |
|            4 | Ministry of Corporate Affairs                 | Commencement of Business                                |
|            5 | Central Board of Direct Taxes                 | Issue of Permanent Account Number (PAN)                 |
|            6 | Central Board of Direct Taxes                 | Issue of Tax Deduction Account Number (TAN)             |
|            7 | Reserve Bank of India                         | Advanced Foreign Remittance (AFR)                       |
|            8 | Reserve Bank of India                         | Foreign Collaboration-General Permission Route (FC-GPR) |
|            9 | Employees’ Provident Fund Organization        | Employer Registration                                   |
|           10 | Employee’s State Insurance Corporation        | Employer Registration                                   |
|           11 | Petroleum and Explosives Safety Organization  | Issue of Explosive License                              |
|           12 | Directorate General of Foreign Trade          | Importer Exporter Code License                          |
|           13 | Department of Industrial Policy and Promotion | Industrial License                                      |
|           14 | Department of Industrial Policy and Promotion | Industrial Entrepreneur Memorandum                      |

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**ANNEXURE – C**

**ANNEXURE REFERRED TO IN REPLY TO PART (c) OF THE LOK SABHA STARRED QUESTION NO. 169 FOR ANSWER ON 31.07.2015.**

**List of 24 State services**

|   **S. No.** | **Department**                           | **Services**                                                       |
|--------------|------------------------------------------|--------------------------------------------------------------------|
|            1 | Register of Firms and Societies          | Registration of firms under Partnership Act , 1932                 |
|            2 | Land & Land Reforms                      | Land Mutation                                                      |
|            3 | Land & land Reforms.                     | Change in Land use                                                 |
|            4 | Commercial Taxes Dept.                   | Profession Tax Registration                                        |
|            5 | Commercial Taxes Dept.                   | Payment of Profession Tax                                          |
|            6 | Drug Controller                          | License under Section 18 of Drugs & Cosmetics Act                  |
|            7 | Factories Department                     | Approval of plan under Factories Act 1948                          |
|            8 | Factories Department                     | Factories License under Factories Act 1948                         |
|            9 | Fire Department                          | NoC from Fire Services Department                                  |
|           10 | Industrial Development Corporation       | Allotment of Land/Shed in Industrial Estate/Area                   |
|           11 | Labour Department                        | Registration under Shops and Establishment Act                     |
|           12 | Municipal Corporation                    | Property Tax Registration                                          |
|           13 | Municipal Corporation                    | Trade License                                                      |
|           14 | Municipal Corporation                    | Issuance of permanent water/sewerage connection                    |
|           15 | Municipal Corporation                    | Permission for Site and Building                                   |
|           16 | Pollution Control Board                  | Consent to establish under Water Act , 1974 and the Air Act , 1981 |
|           17 | Pollution Control Board                  | Consent to operate under Water Act , 1974 and the Air Act , 1981   |
|           18 | State Power Distribution Company         | New Power Connection &Permission to charge the line                |
|           19 | Water Resource Department                | Permission to draw water outside Industrial Area                   |
|           20 | Industrial Development Corporation       | Approval of plan in Industrial Estate/Area                         |
|           21 | Directorate of Town and Country Planning | Completion cum occupancy certificate                               |
|           22 | Ground Water Department                  | Permission to draw water                                           |
|           23 | Department of Food and Supplies          | Weights and Measures registration                                  |
|           24 | Directorate of Boilers                   | Registration under Boilers Act                                     |

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**ANNEXURE - D**

**ANNEXURE REFFERED TO IN REPLY TO PART (d) OF THE LOK SABHA STARRED QUESTION NO. 169 FOR ANSWER ON 31.07.2015.**

Major Initiatives on Improving ‘Ease of Doing Business’ in India.

The Department of Industrial Policy and Promotion (DIPP) has taken up a series of measures to improve Ease of Doing Business. The emphasis has been on simplification and rationalization of the existing rules and introduction of information technology to make governance more efficient and effective. The measures taken are:

1. Process of applying for Industrial License (IL) and Industrial Entrepreneur Memorandum (IEM) has been made online and this service is now available to entrepreneurs on 24x7 bases at the eBiz website. This had led to ease of filing applications and online payment of service charges. Following 14 services are integrated with eBiz portal which will function as a single window portal for obtaining clearances from various governments and government agencies:

| a.  Industrial Licence (DIPP)                              | b.   Industrial Entrepreneurs Memorandum (DIPP)           |
|------------------------------------------------------------|-----------------------------------------------------------|
| c.   Employer Registration with ESIC                       | d.   Employer Registration with EPFO                      |
| e.  Company name availability (MCA)                        | f.    Allotment of Directors' Identification Number (DIN) |
| g.   Certificate of company's incorporation                | h.   Declaration of commencement of business (MCA)        |
| i.    RBI's Foreign Collaboration-General Permission Route | j.   Advance Foreign Remittance (RBI)                     |
| k.   Permanent Account Number (PAN)                        | l.  Tax deduction Account Number (TAN)                    |
| m. Issue of Explosive licence (PESO)                       | n.  Importer exporter code (IEC-DGFT)                     |

1. Notification has been issued on 12-03-2015 by DGFT to limit number of documents required for export and import to three.

1. Ministry of Corporate Affairs has introduced an integrated process for incorporation of a company, wherein applicants can apply for Director's Identification Number (DIN) and company name availability simultaneous to incorporation application [Form INC-29].

1. The Companies Amendment Act, 2015 has been passed to remove requirements of minimum paid-up capital and common seal for companies. It also simplifies a number of other regulatory requirements.

1. A comparative study of practices followed by the States for grant of clearance and ensuring compliances was conducted through M/s Accenture Services (P) Ltd. and six best practices were identified. These were circulated among all the states for peer evaluation and adoption. The study has also identified important bottlenecks faced by industries and important steps required to improve the business environment in States.

1. Application forms for Industrial Licence (IL) and Industrial Entrepreneur Memorandum (IEL) have been simplified.

1. Vide Press Note 3 (2014), Defence products' list for industrial licensing has been issued, wherein large number of parts/components, castings/forgings etc. have been excluded from the purview of industrial licensing. Similarly dual use items, having military as well as civilian applications (unless classified as defence item) will also not require Industrial License from defence angle. For these items only an Industrial Entrepreneur Memorandum (IEM) has to be filed.

1. Vide Press Note 5 (2014), initial validity period of Industrial License has been increased to three years from two years. This will give enough time to licensees to procure land and obtain the necessary clearances/approvals from authorities.

1. MHA has stipulated that it will grant security clearance on Industrial Licence Applications within 12 weeks. In matters other than Explosives and FIPB cases, security clearances are valid for three years unless there is a change in composition of management or shareholding.

1. Partial commencement of production is being treated as commencement of production of all the items included in the license. This has obviated the hardship of licensees to get their Industrial License extended even though they have started production.

1. To facilitate investors and to reply to their queries, Frequently Asked Questions (FAQs) by applicants for grant of industrial license have been developed and uploaded on DIPP website.

1. Vide Press Note 4 (2014), the NIC Code NIC 2008 has been adopted, which is the advanced version of industrial classification. This code will allow Indian businesses to be part of globally recognized and accepted classification that facilitate smooth approvals/registration.

1. Vide Press Note 6 (2014), the 'Security Manual for Licensed Defence Industry' has been issued. This has obviated the requirement of affidavit from applicants Earlier, an affidavit signed before Judicial Magistrate was required from the applicant to confirm that they will comply with the safety & security guidelines/procedures laid down by the Ministry of Defence and Ministry of Home Affairs in Government of India. The applicants were facing difficulties in obtaining such affidavit and this was severely delaying the issue of License even after approval of Licensing Committee.

1. A checklist with specific time-lines has been developed for processing all applications filed by foreign investors in cases relating to Retail/NRI/EoU foreign investments. This has been placed on the DIPP website.

1. An Investor Facilitation Cell has been created in 'Invest India' to guide, assist and handhold investors during the entire life-cycle of the business.

1. Process of applying for Environment and Forests clearances has been made online through Ministry of Environment and Forests' portals [http://environmentclearance.nic.in/](http://environmentclearance.mc.in/) and [http://forestsclearance.nic.in/](http://forestsclearance.nic.in/) .

1. Requirement for Environment Assessment Report is required for industrial shed, school, college, hostel for education institution above 20,000 square meters of build-up area up to 150,000 square meters of build-up area.

1. The issue of time taken in registration with Employees Provident Fund Organization (EPFO) and Employees State Insurance Corporation (ESIC) was taken up with the Ministry of Labour and Employment, Director General, ESIC and Central Provident Fund Commissioner. Both the processes have been automated and ESIC registration number is being provided on a real-time basis.

1. An order facilitating revival and rehabilitation of MSMEs through banker's committee has been issued by Ministry of MSME.

1. A unified portal for Registration of Units for LIN, Reporting of Inspection, Submission of returns and Grievance Redressal has been launched by Ministry of Labour and Employment.

1. DIPP has requested all Secretaries of Government of India and Chief Secretaries of the States/UT to simplify and rationalize the regulatory environment. In order to improve the regulatory business environment they have been requested to take the following measures on priority:

1. All returns should be filed on-line through a unified form;

1. A check-list of required compliances should be placed on Department's web portal;

1. All registers required to be maintained by the business should be replaced with a single electronic register;

1. No inspection should be undertaken without the approval of the Head of the Department; and

1. For all non-risk, non-hazardous businesses a system of self-certification should be introduced.

1. Registration process of VAT and Professional tax has been merged into a single process with single ID on 1 st January, 2015 by the Government of Maharashtra.

1. Registration for VAT in Delhi has been made online. TIN allotment is done real-time and business can start immediately on receipt of TIN number.

1. The time required for giving a new electric connection in Mumbai has been reduced to 21 days from 67 days. The number of procedures involved has been cut down to 3 from existing 7.

1. Simplified procedure for new electric connection in Delhi with reduced procedures and time.

1. Municipal Corporation of Delhi has launched online application process for grant of construction permits for residential and industrial buildings on 16 th March, 2015 and commercial buildings in May, 2015.

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