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Ease of Doing Business Index India notes-CSEET

Ease of Doing Business Index India notes-CSEET

Ease of Doing Business Index India:

ICSI CSEET: The Council of the ICSI has released a notice regarding CSEET on the day of the inauguration of ICSI Golden Jubilee Celebrations on 4th Oct 2017.

The Gazette Notification on the Company Secretaries (Amendment) Regulations, 2020 has been published on 3rd February 2020 in the Official Gazette of India and the same shall be applicable from the said date of publication.

Now ICSI Published a notice regarding CSEET Test which going to start from 2020 May.

We are now going to discuss the details of CSEET Paper-3 Economics and Business Environment notes – Ease of Doing Business Index India

Ease of Doing Business Index India

Ease of Doing Business Index India

Ease of Doing Business Index India:

In the World Bank’s latest Doing Business Report(DBR, 2019), India has recorded a jump of 23 positions against its rank of 100 in 2017 to be placed now at 77thrank among 190 countries assessed by the World Bank. India’ leap of 23 ranks in the Ease of Doing Business ranking is significant considering that last year India had improved its rank by 30 places, a rare feat for any large and diverse country of the size of India. As a result of continued efforts by the Government, India has improved its rank by 53 positions in last two years and 65positions in last four years.

The Doing Business assessment provides objective measures of business regulations and their enforcement across 190 economies on ten parameters affecting a business through its life cycle. The DBR ranks countries on the basis of Distance to Frontier (DTF), a score that shows the gap of an economy to the global best practice. This year, India’s DTF score improved to 67.23 from 60.76 in the previous year.

India has improved its rank in 6 out of 10 indicators and has moved closer to international best practices (Distance to Frontier score) on 7 out of the 10 indicators. But, the most dramatic improvements have been registered in the indicators related to ‘Construction Permits’ and ‘Trading across Borders’. In grant of construction permits, India’s rank improved from 181 in 2017 to 52in 2018, an improvement of 129 ranks in a single year. In ‘Trading across Borders’, India’s rank improved by 66 positions moving from 146 in 2017 to 80in 2018. The changes in six indicators where India improved its rank are as follows:

S. No.Indicator20172018Change
1Construction Permits18152+ 129
2Trading Across Borders14680+66
3Starting a Business156137+19
4Getting Credit2922+7
5Getting Electricity2924+5
6Enforcing Contracts164163+1
Overall rank10077+23

The important features of India’s performance are:

  • The World Bank has recognized India as one of the top improvers for the year.
  • This is the second consecutive year for which India has been recognized as one of the top improvers.
  • India is the first BRICS and South Asian country to be recognized as top improvers in consecutive years.
  • India has recorded the highest improvement in two years by any large country since 2011 in the Doing business assessment by improving its rank by 53 positions.
  • As a result of continued performance, India is now placed at first position among South Asian countries as against 6th in 2014.

Indicator wise highlights of India’s performance are:

  1. Construction Permits
  2. Procedures reduced from 37 to 20 in Mumbai and from 24 to 16 in Delhi
  3. Time reduced from 128.5 to 99 days in Mumbai and from 157.5 to 91 days in Delhi
  4. Building quality control index improved from 12 to 14 in Mumbai and 11 to 14 in Delhi
  5. Cost of obtaining construction permits reduced from 23.2 percent to 5.4 percent
  6. DTF score improved from 38.80 to 73.81
  7. Trading Across Borders
  8. Changes in time and cost are as follows:
DelhiImportExport
Documentary ComplianceBorder ComplianceDocumentary ComplianceBorder Compliance
Time (hrs.)Cost ($)Time (hrs.)Cost ($)Time (hrs.)Cost ($)Time (hrs.)Cost ($)
20175614026255021GO125413
2013251009232368077253

 

MumbaiImportExport
Documentary ComplianceBorder ComplianceDocumentary ComplianceBorder Compliance
Time (hrs.)Cost ($)Time (hrs.)Cost ($)Time (hrs.)Cost ($)Time (hrs.)Cost ($)
201765129267536539435343
201335100102340247554250

Source: pib.gov.in

  1. Robust Risk Management System has reduced inspections significantly
  2. e-Sanchit allows traders to file all documents electronically
  3. Time and cost to export reduced through the introduction of electronic self-sealing of container at the factory
  4. Starting a Business
  5. Procedures reduced from 11 to 10 in Delhi and 12 to 10 in Mumbai
  6. Time reduced from 30 to 16 days in Delhi and 29.5 to 17 days in Mumbai
  7. PAN, TAN, DIN now merged with SPICe making it a single form for company incorporation
  8. No requirement of inspection for registration under Shops & Establishment in Mumbai
  9. Distance to Frontier improved from 75.40 to 80.96
  10. Access to Credit
  11. Rank improved from 29 to 22
  12. DTF improved from 75 to 80
  13. Strength of legal rights index improved from 8 to 9
  14. Secured creditors will now be repaid first during business liquidation hence given priority over other claims
  15. Access to Electricity
  16. Procedures reduced from 5 to 3 in Delhi and 5 to 4 in Mumbai
  17. DTF improved from 85.21 to 89.15

Improvement has taken place due to the commitment of the Government to carry out comprehensive and complex reforms, supported by the bureaucracy which has changed its mindset from a regulator to a facilitator. The Government has undertaken an extensive exercise of stakeholder consultations to understand challenges of the industry, government process re-engineering to provide simplified and streamlined processes to create a more conducive business environment in the country. As a result of continued efforts, India’s rank has improved as follows:

Year2014201620172018
Overall rank14213010077
DTF53.9756.0560.7667.23

 

The eight indicators in which India has improved its rank over last four years:

S. No.Indicator20142018Change
1Construction Permits18452+ 132
2Getting Electricity13724+113
3Trading across Borders12680+46
4Paying Taxes156121+35
5Resolving Insolvency137108+29
6Enforcing Contracts186163+23
7Starting a Business158137+21
8Getting Credit3622+14

Source: pib.gov.in

EASE OF DOING BUSINESS INDEX BY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE (DPIIT) FOR STATES

Department for Promotion of Industry and Internal Trade (DPIIT), in coordination with Central Ministries/Departments and Governments of States/Union Territories (UTs), has taken several reform measures with an aim to improve regulatory environment and facilitate doing business in India. The details of action taken in this regard are given below:

  1. World Bank’s Ease of Doing Business Assessment

The World Bank released the Doing Business Report (DBR), 2019 on 31st 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.IndicatorRank
1.Starting a Business137
2.Dealing with Construction Permits52
3.Getting Electricity24
4.Registering Property166
5.Getting Credit22
6.Protecting Minority Investors7
7.Paying Taxes121
8.Trading Across Borders80
9.Enforcing Contracts163
10.Resolving Insolvency108
Overall77

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

  1. The minimum capital requirement for public and private company has been eliminated under the Companies (Amendment) Act, 2015.
  2. 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).
  3. 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.
  4. 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.
  5. Incorporation fee reduced to zero for companies with authorized capital up to INR 15 lakhs
  6. 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.
  7. Online and common registration for EPFO & ESIC is provided on ShramSuvidha Portal.
  8. Registrations under Mumbai Shops & Establishments Act are provided in real time without any cost and any inspection
  9. Eliminated the requirement of bank account details for GST registration

(ii)   Dealing with Construction Permits:

  1. 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.
  2. Unified building bye-laws 2016 have been introduced in Delhi.
  3. Deemed approvals have been introduced in Delhi, if approvals are not granted within defined timelines.
  4. Risk based classification of buildings has been introduced for fast tracking building plan approval, inspection and grant of occupancy-cum-completion certificate.
  5. Requirement of submitting notarized certificates or affidavits for building plan approval has been replaced with e-undertaking in Delhi.
  6. Multiple inspections at completion stage have been replaced by single joint inspection in Delhi.
  7. Road cutting and restoration for water and sewer connections have been simplified.

(iii)  Getting Electricity

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

(iv)  Getting Credit

  1. Secured creditors are paid first during business liquidation, and hence have priority over other claims such as labour and tax.

(v)   Paying Taxes

  1. 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.
  2. Corporate income tax has been reduced from 30% to 25% for companies with a turnover up to INR 250 crore.
  3. Electronic System for payment of Social Security Contributions has been introduced enabling easier return payment.
  4. Making payment of EPF has been made mandatory electronically.
  5. 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

  1. 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.
  2. Enhancement of risk-based inspections for both imports and exports, whereby only about 5% of goods are physically inspected.
  3. Advance Bill of Entry has been adopted which allows importers to start the process of customs clearance before the arrival of the vessel.
  4. Equipment on the NhavaSheva 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 of2,400,000 TEUs, was completed in February 2018.
  5. 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.
  6. 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

  1. National Judicial Data Grid has been introduced which makes it possible to generate case measurement report on local courts.
  2. 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

  1. 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.
  2. Professional institutions have been established for effective handling of restructuring and insolvency proceedings.
  3. Time-bound resolution process is done under the IBC and liquidation is the last resort.
  4. 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.
  5. Implementation of Business Reforms by States/UTs
  6. 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.
  7. 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.
  8. 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.
  9. 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.
  10. Initiatives taken by DPIIT for the reform process:
  11. A nationwide workshop was held on 29th 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
  12. 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

  1. 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
  2. To handhold all the 8 north-eastern States, video conferences were arranged.
  3. The assessment of States/UTs under Business Reform Action Plan, 2017-18 was released jointly by DPIIT and the World Bank on 10th July, 2018.
  4. Some important achievements under the exercise for 2017-18 are:-
  5. 19 States have designed an Information Wizard providing information for all approvals, licenses, registrations timelines, and procedure to establish business/industrial unit (pre­establishment & pre-operation).
  6. 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.

  1. 21 States/UTs have implemented a GIS system to provide details about the land earmarked for industrial use across the State
  2. 23 States/UTs have reduced the number of documents required for Obtaining Electricity connection to only 2
  3. 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.

  1. 20 States/UTs implementing an online application system Wholesale Drug License and Retail Drug License (Pharmacy).
  2. 18 States/UTs have online systems for Registration of Partnership firms and Societies,
  3. 20 States/UTs have implemented an online system for registration and renewal under the Legal Metrology Act, 2009.
  4. Business Reform Action Plan 2019 for States
  5. An 80 point Action Plan, 2019 has been prepared by DPIIT and shared with all the States and UTs for implementation of reforms.
  6. 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).

  1. 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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