Background :- 

India’s rank in the World Bank’s Ease of Doing Business 2019 survey climbed 23 places to 77 among 190 countries surveyed, making it the only country to rank among the top 10 improvers for the second consecutive year.

Last year, India saw a record jump of 30 places to reach the 100th position in the rankings. New Zealand topped the list of 190 countries in ease of doing business, followed by Singapore, Denmark, and Hong Kong. The United States is placed eight and China has been ranked 46th. Neighbouring Pakistan is placed at 136. The Doing Business report ranks countries on the basis of distance to frontier (DTF), a score that shows the gap of an economy to the global best practice. The World Bank has recognised India as one of the top improvers for the year. This year, India features among the report’s list of top 10 improvers for the second year in a row and only one in BRICS to feature in this list. India is seeking to reach the 30th position by 2020, according to an output-outcome framework document prepared by the government.  It will help India maintain its goal of strong and sustained economic growth, attract more FDI, achieve sound living standards and moderate inflation. The Doing Business 2019 report bases the rankings on field surveys and interviews with corporate lawyers and company executives in Delhi and Mumbai.

Reasons for improvement :- 

• Improving MSME sector: India’s strong reform agenda to improve the business climate for small and medium enterprises is bearing fruit.
• Faster registration process: Starting a business was made easier through consolidation of multiple application forms and introduction of a goods and services tax (GST), while getting electricity was made faster and cheaper.
• Infrastructural Development and fiscal reforms: Government focus on logistics and supply chain centred initiatives and fiscal reforms like Insolvency and Bankruptcy Code has helped in promoting trade and business.
• Reduction in Corruption: Many initiatives such as Aadhaar, making registration online, acceptance of
  electronic signatures etc. has been taken. In fact, there has been a considerable year-on-year fall in the number of companies that viewed ‘corruption’ as a major barrier – from 51% in 2015 to 25% in 2017.
• Improvement in construction permits: It was improved by implementing the single-window clearance system in Delhi and the online building permit approval system in Mumbai.
• Improvement in trading across borders: It was achieved by reducing the time and cost to export and import through various initiatives, including the implementation of electronic sealing of containers, upgrading of port infrastructure and allowing electronic submission of supporting documents with digital signatures under its National Trade Facilitation Action Plan 2017-2020.

Steps by the government to enhance Ease of Doing Business :-

• Ease of Doing Business Grand Challenge: The objective of this challenge is to invite innovative ideas based on Artificial Intelligence, Internet of Things, Big Data Analytics, Blockchain and other cutting edge technology to reform Government processes. The platform for the Grand Challenge is the Startup India Portal.
• Companies Amendment (Ordinance), 2018: The Ordinance, which has been promulgated is based on the recommendations of the Committee appointed by the Government to review offences under the Companies Act, 2013.
• Industrial Park Rating System: Under this Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry has undertaken the exercise to rate the industrial parks on parameter such as: internal infrastructure, external infrastructure, business services and facilities, environment, safety management and connectivity.
• Relaxation in Building Norms:The Ministry of Environment, Forest and Climate Change (MoEFCC) issued a notification easing the green norms for the building and construction sector, wherein residential projects up to 1.5 lakh square metres (built-up area) will not require ‘prior environmental clearance’. Urban local bodies such as municipalities will now have the power to grant building permission, directly benefiting the EoDB ranking for the housing and construction sector.

Challenges :- 

• Challenges like fluctuating commodity prices and exchange rates, and lack of basic infrastructure continue to persist.
• Doing business in a country like ours, with its cultural, geographical, demographical diversity is not an easy endeavor.
• There remain significant complaints about around the lack of transparency around business approvals, particularly in the case of statutory approvals for investments.
• The extent of digitalisation, however, varies markedly across sectors, as does corruption, with those engaging in infrastructure projects still reporting significant issues relating to corruption.
• The key issue for those outside India is increasingly market demand for their products and services relative to government and bureaucracy-related barriers.
• Those currently doing business in India cite ‘taxation issues’ as a consistent barrier, whilst those looking to enter the Indian market understandably rate ‘identifying a suitable partner’ as their most salient issue after a considerable decline in ‘legal and regulatory impediments’ from 2017 to 2018.
• Relaxing Building norms for EoDB has sent ripples of fear and anticipation among environmentalists and green activists across the nation considering the extent of corruption in municipalities across the nation.

Way Forward :- 

• Cooperation: As highlighted by the Economic Survey, addressing deep-rooted problems will only be possible through extensive cooperation between the organs of the government—“cooperative separation of powers”.
• Need for Strong Contract Enforcement: A sound contract enforcement mechanism is essential for maintaining business confidence, reducing uncertainty and promoting fair play in the economy. The Economic Survey 2017-18 tried to highlight the impact of this problem by drawing attention to the costs of stalled projects and legal fees.
• Ease of Taxation & Improvements in GST: Further simplification of returns processes, addressing concerns for India’s huge MSME/SME sectors etc. are necessary steps that need to be taken to reap the kind of benefits envisioned during GST inception.
• Simplified Infrastructure and Government frameworks: Better roads and transportation facilities speed up the transportation of goods and brings up the efficiency of the business. Introduction of E-Way bills and changing regulatory frameworks around inter/intra state bill movements for instance is a good example of unified policies that will help in further building the right frameworks.
• Enhanced Cross Border Functionalities across the varied business segments: For example, we can further integrate registration processes into a single form by converging GST with PAN/TAN registration.
• Further Technology Enhancement: Interlinking of existing technologies to boost up business in different industries like healthcare, tourism, education etc.
• Registering Property: Digitization of land records and maps and transparency on encumbrances will ease the process of registering property.
• Resolving Insolvency: Increased usage will lead to recognition; the indicator will improve as more insolvent companies opt for reorganization plans instead of liquidation.