Improvement in Ease of Doing Business (EoDB) has been the key priority of the government authorities over the last several years. They have remained steadfast on the EoDB reforms path, with an unprecedented policy focus on rationalization, simplification, and digitization of regulatory compliances & procedures.
Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry, GoI, which is the nodal department for facilitation of business reforms at pan-India level, has been spearheading several important initiatives. DPIIT has encouraged states to continue improving the business environment by introducing reformmeasures under its annual ‘Business Reform Action Plan’ (BRAP) exercise started since 2014. Similarly, with a view to integrate and facilitate the regulatory approval processes across states for businesses, DPIIT in 2021 launched the National Single Window System (NSWS), which has been rapidly evolving to expand its coverage to maximum areas. Some of the other landmark initiatives of DPIIT on EoDB includes the launch of the information portal ‘India IndustrialLand Bank’ (IILB); presentation of the Jan Vishwas (Amendment of Provisions) Bill, 2022 in the Parliament (proposing to decriminalize 44 business laws); and continued campaign to reduce the regulatory compliance burden for industry.
CII, working under the aegis of its Task Force on Ease of Doing Business, has been a proactive partner with the government in all key EoDB reform initiatives. It has been regularly providing suggestions/feedback on BRAP, NSWS, decriminalization of business laws, reduction in regulatory compliance burden, just to mention a few. The policy makers have favorably considered majority of CII’s suggestions. The Union Budget 2023-24 also considered an array of CII recommendations on EoDB, including introduction of Permanent Account Number (PAN) as a single ID for businesses for all digital approvals.
Some Recent Key EoDB Developments
Union Budget 2023-24 – Accent on EoDB Reforms
The Union Budget 2023-24 has laid thrust on continuity of rationalization, Digitisation, and automation drive in regulatory approval processes. In this endeavor, several landmark reforms have been announced.
First, Permanent Account Number (PAN) shall now be used as the common identifier for all digital systems for regulatory approvals.
Second, a system of ‘Unified Filing Process’ will be set up, which will allow sharing of common information with all relevant agencies as per filer’s choice, eliminating the need for multiple submission of documents for approvals.
Third, an Entity DigiLocker will be set up, which will enable storing and sharing the documents with relevant departments, regulators, banks, and other business entities, as and when required. It will also mitigate the need for multiple notarized/true copies for applications.
Fourth, phase-3 of the e-Courts project will be launched with an outlay of Rs 7,000 crore for introducing greater digitization of commercial courts for enhancing transparency as well as ensuring speedy resolution of commercial disputes.
Fifth, a voluntary settlement scheme ‘Vivad-se-Vishwas-2’ shall be implemented, seeking to settle contractual disputes between the government and private parties. The first version, introduced in 2020, resulted in the resolution of more than 148,000 income tax cases, with recovery of about 54% of the amount under litigation.
Expansion in Scope of NSWS
Launched on 22nd September 2021, NSWS facilitates new investors by way of providing guidance to identify, apply as well as obtain regulatory approvals involving most of the Central ministries/states. It helps investors to know the approvals required by them, save information filed and download approvals.
Currently, the ‘Know Your Approvals’ (KYA) module provides relevant information across 32 Central Departments and 31 State and investors can seek approvals from 28 Central ministries and 21 states. In recent months, the portal has started granting approvals from the Ministry of Mines, Ministry of Coal, and Petroleum and Explosives Safety Organization (PESO).
The recently launched PARIVESH 2.0, providing approvals for environment and forest related matters, has also been integrated with NSWS. As NSWS will shortly be covering the existing businesses as well, we must continue to provide feedback to DPIIT on a regular basis.
Improvement in India Industrial Land Bank (IILB)
The India Industrial Land Bank (IILB), launched on 29th August 2020, is a GIS-based portal which serves as a one-stop repository of all industrial infrastructure- related information such as connectivity, infrastructure, natural resources & terrain, plot-level information on vacant plots, line of activity, and contact details. It aims to provide information on available land for prospective investors looking at setting up units in the country. The links to State GIS Portals and State Land Banks are useful aspects of IILB. IILB has seen several upgrades in the recent times to enhance the user experience such as availability of active query resolution and redirection on the portal and launch of the IILB Mobile Application with features such as ‘Explore Parks’, ‘Direct Call Feature’ and ‘Compare Parks’. Further, IILB has been integrated with the PM-Gati Shakti Platform and NSWS.
Jan Vishwas (Amendment of Provisions) Bill, 2022 Seeking extensive decriminalization of business laws, the Jan Vishwas (Amendment of Provisions) Bill, 2022, was introduced in the Lok Sabha on 22nd December 2022, which was subsequently referred to the Joint Committee (of the Parliament), Chaired by Shri P. P. Chaudhary. The Bill proposes to amend 42 laws across multiple sectors, including agriculture, environment, and media & publication. Acts being amended include the Indian Post Office Act, 1898, the Environment (Protection) Act, 1986, the Public Liability Insurance Act, 1991, and the Information Technology Act, 2000.
The Bill converts several fines to penalties, meaning that court prosecution is not necessary to administer punishments. The Bill increases the fines and penalties for various offences in the specified Acts.
CII has been sharing inputs with the government in pre as well as post introduction of the Bill, our suggestions, in general, have revolved around the need to retain criminal provisions only for very serious offences, replacing imprisonment and fines with penalties in remaining cases.
While the Bill is largely in line with CII’s suggestions, the Bill should be applied retrospectively for decriminalized offences and replace ‘fine’ (requiring court’s direction) with ‘penalty’ (requiring executive’s intervention) for all possible cases. The Joint Committee, which submitted its report in the Loka Sabha on 20th March 2023, has endorsed these suggestions and has recommended continued efforts by the center and states to decriminalize more non-serious offences.
World Bank’s Logistics Performance Index
The World Bank’s Logistics Performance Index (LPI) 2023 has ranked India at 38th position (out of 139 economies), recording an improvement of 6 positions. The improvement is result of several key initiatives of the government, including the PM Gati Shakti National Master Plan, which seeks to break silos among different Departments/Ministries in States/UTs by combining all relevant data on a National Master Plan and State Master Plans (portals) respectively. Also, in September 2022, the National Logistics Policy (NLP) was launched which acts as a guiding document for States/UTs seeking to formulate logistics policy (19 States/UTs have notified their logistics policy). It puts marked emphasis on streamlining processes for seamless coordination and reduction in overall logistics cost.
First Meeting of Govt-CII Task Force on EoDB
The first of its kind Task Force formulated between the government and CII started with the inaugural meeting of the ‘Government – CII Taskforce on EoDB’ on 30th January, 2023 under the Chairmanship of Shri Anurag Jain, then Secretary DPIIT. The Task Force, with participation of 8 Central miniseries and industry leaders, seeks to identify and resolve key EoDB bottlenecks in a focused manner.
As per discussion in the first meeting, 4 Working Groups on the following topics have been set up to provide high impact suggestions: (i) Minimizing regulatory compliance burden, (ii) Easing paying taxes, (iii) Decriminalization of business laws, and (iv) Improving enforcing contracts mechanism. These Working Groups will shortly finalize the reports in consultation with officials of the concerned ministries and submit the report to the Govt-CII Task Force on EoDB for necessary policy intervention. Stakeholders are invited to keep sharing their high impact EoDB suggestion for consideration of the Govt-CII Task Force.
In sum, a series of business reforms are being introduced by the government for improving the investment climate on sustained basis. While these reforms have started yielding results on-ground for industry, we must start leveraging the platforms of ‘CII Task Force on EoDB’ and ‘Government-CII Task Force on EoDB’, to continue providing suggestions on new as well as implemented areas of reforms on a regular basis.
The article was contributed by Mr Ajay Shriram, Chairman, CII Task Force on Ease of Doing Business and Chairman & Senior Managing Director, DCM Shriram Ltd and was first published in the May 2023 issue of CII EoBD Watch.