Policy November 2018, Volume 7, Issue 6

Focus: Ease of Doing Business

T
  he Doing Business Report
(2019) of the World Bank,
which assesses India on the basis
of data collected from Delhi and Mumbai,
has ranked the country at the 77th position
(out of 190 economies), up from the 100th
position in 2018 and the 130th position in
2017. The country has registered a sharp
improvement of 65 positions in the last 4
years and aspires to join the league of top
50 nations soon, powered by a plethora
of reforms introduced by both the Central
and the State Governments. There has been
significant improvement in the ranking of
indictors such as Dealing with Construction
Permits, Trading across Borders, Starting a
Business, Resolving Insolvency and Getting
Credit in the last 2 years.
The Department of Industrial Policy
and Promotion (DIPP), Government of
India, has taken the drive to boost
competitive federalism among all States /
UTs to improve the business environment,
which has started yielding results in
good measure. The introduction of the
online Single Window System (SWS)
by various States is perhaps the most
significant business reform, which improves
transparency, efficiency, accountability and
timeliness in obtaining approvals / licenses /
NOCs from the Government authorities. As
many as 21 States have already established
an online SWS, resulting in reduction in
regulatory and documentary compliances.
It is hoped that these States will continue
working in the direction of making SWS
as effective and comprehensive as possible
and the remaining States will soon join
the bandwagon.
Similarly, a plethora of business reforms
have been introduced in areas such as
land procurement, labour compliances,
inspections and environmental approvals,
among others. In the case of land
procurement, for instance, an increasing
number of States are digitizing and
integrating land records at various levels,
besides introducing the Geographical
Information System (GIS), land banks and
easier land conversion policy. Likewise,
several States are providing the facility of
filing the single unified annual return under
various labour laws, self-certification for
low risk industries, third-party certification
for medium risk industries and synchronized
joint inspections. For reducing the
compliance burden for inspections, 18
States have set up the Central Inspection
System (CIS), which attempts to integrate
inspections under various departments.
CII has been actively supporting the
Government, at both Central and State
levels, in effective implementation of
business reforms. With a view to facilitate
sustained improvement in the business
environment, we have been providing
policy inputs to the relevant departments
of the Government regularly. Many of
our suggestions have been considered
favorably by the Government whereas
others are under active consideration. We
have also been conducting regular surveys
across States to assess the effectiveness
of implementation of important reform
measures and identify issues requiring
further policy intervention. CII has also
been active in creating awareness about
the business reforms introduced by the
Government among the Industry Members
through conferences, publication, mails and
social media.
While the country has made tremendous
strides in the direction of improving the
investment climate, there is still a long
distance to cover. India ranks poorly in
indicators of Registering Property (166),
Enforcing Contracts (163), Starting a
Business (137), Paying Taxes (121) and
Resolving Insolvency (108). Similarly,
there appears to be large gaps in actual
implementation of reforms and their on-
ground benefits to the Industry in several
States.
With a view to help India register sustained
improvement in the Doing Business ranking
and address the gaps in introduction and
delivery of reforms to the Industry, CII is
working closely with Central and State
Governments. We endeavor to see India
among the top destinations for investors,
with all States / UTs being able to offer
wider business opportunities.  n
Chandrajit Banerjee
Director General
Confederation of Indian Industry

Inside this Issue

Message From the
Director General............ 1
Chandrajit Banerjee,
Director General, CII
CEO Speak............................................................................................ 2 Policy Barometer.......... 5
Sumit Mazumder, Past President, CII, Chairman, CII Task Force on Ease of Doing
Business and CII Task Force on Integrity and Transparency in Governance and Industry Voices............. 7
Chairman  & Managing Director, TIL Limited
Factfile......................... 8

policy watch 1
CEOSpeak
Ensure Effective Delivery of Business
Reforms to the Industry
India has registered a sharp
improvement in the Doing Business
Report of the World Bank. It is
heartening to note that India has
moved up the ranks from 142 in
2014 to touch the 77th position
now. What are the major reasons
for such a significant improvement
in the country’s performance?
Over the past few years, Government
of India has introduced transformational
business reforms with a view to enhancing
the investment climate in the country. The
result has been a sustained improvement
in India’s position on the World Bank’s
Doing Business rankings, leapfrogging by
65 notches in the last 4 years.
The sharp northward movement in India’s
2 policy watch
Sumit Mazumder
Past President, CII, Chairman, CII Task Force on
Ease of Doing Business and CII Task Force on
Integrity and Transparency in Governance and
Chairman & Managing Director, TIL Limited
ranking in the last 2 years could essentially
be attributed to the significant reforms
undertaken in the areas of Dealing with
Construction Permits, Trading Across
Borders, Paying Taxes, Resolving Insolvency,
Getting Credit, and Protecting Minority
Investors. Growing focus on simplification,
rationalization and digitization of regulatory
processes and procedures is resulting in a
significant reduction in documentation, time
and compliance cost for businesses.
What according to you is the key
message emerging for India from
the latest Doing Business rankings
of the World Bank?
The key message, according to me, is that
we are capable of introducing big - ticket
reforms that can result in tectonic shifts
in the rankings. This year our ranking
leapfrogged by 129 in Dealing with
Construction Permits, 66 in Trading Across
Borders, and 19 spots in Starting A Business.
Source: nmedia\shutterstock.com

We should, therefore, face no problem in
further improving the rankings in laggard
areas such as Registering Property (166),
Enforcing Contracts (163), and Starting
a Business (137). Further, we should be
focusing on ensuring effective delivery of
business reforms at the ground level for
all types of businesses, which probably was
among the main reasons why we did not
record any improvement in the rankings
of Paying Taxes and Resolving Insolvency
this year, despite the implementation of
breakthrough reforms in the form of GST,
IBC, digitization of procedures, among
others.
DIPP has been ranking States on
the implementation of business
reforms for the past 3 years.
Has this helped in increasing
competition among the States?
With a view to promoting competition
among States and Union Territories (UTs),
the Department of Industrial Policy &
Promotion (DIPP) has been assessing and
ranking States annually under the Business
Reform Action Plan (BRAP) since 2015.
In the latest results, covering 372 areas
of reforms and 36 States / UTs, Andhra
Pradesh topped the list by scoring 98.3%,
followed by Telangana (98.2%), Haryana
(98.06%), Jharkhand (98.05%) and Gujarat
(97.99%). On the other extreme are
States / UTs like Meghalaya, Lakshadweep,
Arunachal Pradesh, Sikkim and Manipur
which could not implement even 1% of
the recommended reforms.
The BRAP has been extremely helpful
in generating the spirit of competitive
federalism among the States. This is evident
from the fact that implementation of
business reforms, on an average, has been
improving consistently from 32% in 2015
to 48.93% in 2016 and 59.21% currently.
Half of the 36 States / UTs surveyed have
scored nearly 94% in the latest BRAP survey.
Further, the top 5 States are ranked very
close, with the difference in scores being only
0.31% between Andhra Pradesh (ranked
first) and Gujarat (ranked fifth). This clearly
shows that States are competing intensely
CEOSpeak
Source: fuyu liu\shutterstock.com
to stay ahead of each other in the BRAP
rankings.
While DIPP has been continuously
augmenting the scope and horizon
of BRAP recommendations year
after year, what further measures
may be considered for inclusion
going forward?
BRAP lays down a number of reforms
undertaken by the Government with regard
to creating a conducive environment for
doing business. The focus is on business
licensing, inspections and regulatory practices
and policies. The objective of the action plan
is to effectively reduce the burden faced by
entrepreneurs in dealing with Government
procedures and processes. Besides regulatory
compliances, the investment climate also
depends on a multitude of factors, including
the availability of raw materials, skills,
infrastructural facilities and the law and
order condition. With time, we hope that
such aspects would also be factored in for
assessing and ranking States.
policy watch 3
CEOSpeak
There is a feeling that while States
have fast-tracked reforms, their
effectiveness at the ground level
has been lacking. What should be
done to tackle this issue?
Various CII surveys have been indicating
large gaps in implementation of business
reforms across States. We have been working
closely with departments across various
States for reducing such gaps. Several State
Governments have been receptive to our
feedback and are working on the policy
inputs provided by us.
It is also significant to note that DIPP, from
the next survey onwards, may only invite
feedback from the users of reforms rather
than from all the State Governments. This
will change the rules of the game in a
big way and States would obviously pay
much greater attention to the delivery of
reforms. CII will work even more closely
with State Governments to support them
in this mission.
What according to you will be the
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top areas of ease of doing business
reforms, which should be given
special focus?
First, the online Single Window System
(SWS) must be made truly effective at the
pan-India level with the provision of online
application, tracking, deemed approval and
payment. The SWS should also encompass
the integrated online joint inspections by
various departments.
Second, procurement of land for industrial
purposes should be made easier by
introducing greater digitization and
streamlining of the process across States.
Stamp duty rates should also be rationalized
in majority of the States.
Third, labour compliances should be
made simpler and easier across States by
leveraging digitization. Further, the scope
of self / third party certifications should
be augmented. There is also a need for
increasing the threshold limit for applicability
of Industrial Disputes Act, Factories Act and
Contract Labour Act, as has already been
done by a few States.
Source: inamar\shutterstock.com
Fourth, the dispute resolution mechanism
needs to be strengthened through initiatives
such as filling up of vacancies in the courts
and also making the court systems more
digitized, business friendly and efficient.
The Alternative Dispute Resolution (ADR)
mechanism should also be developed at a
pan India level.
Fifth, the process of obtaining construction
permits must be streamlined, digitized and
made effective across States. Measures such
as the use of Auto DCR software for building
plan approvals and widening the scope of
self / third party certification would help.
Sixth, trade facilitation reforms should
continue to receive special focus of
the Government as the dwell time and
cost are still high in comparison to the
global standards. The Government must
continue to introduce more trade reforms
aimed at simplification, modernization
and harmonization of trade processes for
effectively bringing down the transaction
costs of business. n

Key CII Recommendations for Ease of Doing
Business
Indicator
Dealing with Construction Permits
Uniform building bye-laws
Single joint inspection
Conflict resolution mechanism
Use of Auto CAD
Contract Enforcement
Ensure effective implementation of e-court
mechanism
Simplify payment procedure
Availability of adequate court infrastructure
Dedicated portal for commercial disputes
Environment Registration Enablers
Unified environmental clearance mechanism
Auto renewal of consent to establish/ consent to
operate approval
Online application for CTE / CTO
Exemption of white category industries
Inspection Enablers
Central Inspection System (CIS)
Criterion for inspections
Timely provision of inspection reports
Synchronized joint inspections
Computerized assessment
Labour Regulations
Integration with Shram Suvidha portal
Allow self / third party certification for specific
industries
Policy Barometer
Recommendations
Ensure a comprehensive uniform building code / building bye-laws in a State
Ensure single joint site inspections by departments such as Fire, Sewage, Electricity,
Labour, Water departments among others
Set up a dedicated conflict resolution mechanism for land and construction
permits
Expand the coverage of Auto CAD
Establish and ensure effective implementation of paperless courts with provisions
such as e-filing, e-summons, e-payments and e-cause lists
Merge the payment of court and process fees
Provide necessary infrastructure in commercial courts such as mediation centers,
video conferencing hall, separate record room, litigants' waiting room, amongst
others
States should develop a dedicated online portal for commercial courts to create
a single point of contact for related information
Allow for unified single clearance for environment related approvals / NOCs
for business projects
Allow auto-renewal of CTE / CTO after 5 years or more based on self/third
party certifications
Allow online application for CTE / CTO under Air & Water Acts
Exempt white category industries from avoidable environment clearances
Set up CIS for inspections by departments of boilers, industries and commerce,
labour, PUC among others
Inspection to be done based on risk profile (such as High, Medium and Low
risk) of industries under all labour laws
Upload inspection reports within 48 hours of inspection
Mandate synchronized joint inspections under various labour laws
Inspections should be done using computerized risk assessment system
All State Governments should integrate with the Shram Suvidha Portal to facilitate
filing of Single Unified Annual Return under various labour laws
Allow self-certification for approvals / clearances for all low risk industries and
third-party certification for medium risk industries under all labour laws
policy watch 5
Policy Barometer
Indicator
Real-time information availability
Third party agencies
Obtaining Utility Permits
Reduce documentation requirement
Provision for online tracking system
Online Single Window System (SWS)
Interlink SWS with Central Inspection System (CIS)
Introduce ‘perform or perish policy’
Mandated timelines for raising queries
Allow for deemed approvals
Automatic escalation
Grievance redressal mechanism
Registering Property / Land Acquisition
Introduce Geographical Information System (GIS)
Rationalization of stamp duty
Integrate the mutation and registration process
Digitization and integration of data records at
various levels
Integrate sub-registrar’s office, PAN and Aadhar Data
Trading Across Borders
Strengthen the Port Community System (PCS)
Enhance Port Infrastructure
Regulate approvals from PGAs
6 policy watch
Recommendations
Ensure availability of real time information, while filling the form for registration /
renewal / licenses
List of third party agencies should be made available on the concerned
department’s website
Reduce the number of required documents to only two i.e. identification and
ownership / occupancy proof across all States
Introduce an online mechanism for application submission, tracking, approval
and payment for obtaining a new electricity connection
The online Single Window System should encompass the CIS, which allows for
joint inspections under several departments (like fire, factories, boilers etc.)
Introduce a policy of ‘Perform or Perish’ to inculcate discipline amongst officials
and ensure adherence to the timelines
Raise additional queries/clarifications about the submitted application within 3
days of online application
Provide deemed approval clause in State Single Window Acts at pan-India
level
Automatic escalation of cases to the higher authorities, if mandated timelines
are not followed in approvals
Grievance redressal mechanism with clear penalties against officers causing
delay
Introduce GIS across all States and interlink it with SWS of respective States
Rationalize stamp duty rates across States
Integrate the procedures of land mutation and land registration
Digitize and integrate data at sub-registrar’s office, land records office and
local municipality office
Integrate sub-registrar offices with PAN and Aadhar data
Strengthen PCS across ports / ICDs with provision for real time message
exchange system among all stakeholders
Strengthen the port infrastructure by ensuring:
• Gate automation
• Provision of dedicated truck lanes designated only for Direct Port Delivery
(DPD) or Authorized Economic Operators (AEOs)
• Availability of Participating Government Agency (PGA) testing laboratories
within the port premises
While SWIFT provides for online approval from 6 PGAs, there is a need to
bring all PGAs on-board
 Industry Voices

The Government of India has accorded a high priority to the ease of doing business reforms in the last
few years. A series of initiatives have been taken, mandating digitization of procedures, revising and
eliminating obsolete policies and promoting e-governance. These measures have enthused the business
sentiment in the country by ensuring greater efficiency, transparency and reduction in transaction cost. It
is encouraging to see that State Governments are also addressing this issue. Even though there is a lot
more to be done, with continued momentum of business reforms, India should aim to improve its ranking
and be amongst top 50 best countries for doing business.
Ajay S Shriram
Past President, CII, Chairman, CII-FBN India Chapter Council and Chairman & Senior Managing Director, DCM Shriram

The Government of India in the last few years has been working assiduously for improving the trading
environment in the country. The Indian customs has launched SWIFT, which integrates several forms required
by multiple regulatory agencies. In order to promote paperless trade, CBIC has launched e-Sanchit, an online
platform that allows traders to submit all supporting documents for clearances electronically, besides mandating
the usage of e-Delivery Orders, e-Payments and e-Invoice. Measures have also been undertaken to encourage
Direct Port Delivery, Direct Port Entry, and AEO Programme, thereby facilitating faster clearances.
Milon K Nag
Co-Chairman, CII Task Force on Ease of Doing Business and Chairman & Managing Director, K K Nag Pvt Ltd

Environmental compliances have been significantly simplified with the introduction of risk-based parameters
and technological advancements in the processes.
R Mukundan
Member, CII Task Force on Ease of Doing Business, Chairman, CII Institute of Quality Advisory Council and
CII National Committee on Environment and MD & CEO, Tata Chemicals

The Government has introduced several reforms to induce transparency and accountability in compliance
of labour laws. Measures such as the introduction of the unified Shram Suvidha Portal, online real-time
registration process for ESIC and EPFO and Common Registration Service on the e-biz Portal of DIPP,
among others, have been immensely useful for the Industry. Going forward, there is a need for bringing
uniformity in labour laws and streamlining inspection process across States.
Piruz Khambatta
Chairman, CII Western Region and Chairman & Managing Director, Rasna Pvt Ltd

policy watch 7
Factfile

Doing Business Ranking 2019 - Select Countries

176
TotalCountries
Total Countries- -190
190
136
124
109 110
100
77 82
46 73
1 2 3 4 5 31 54
Denmark

Hong Kong SAR,

Korea, Rep.
New Zealand

Singapore

Russia
Brazil

India

China

South Africa

Indonesia
Bangladesh

Pakistan

Mexico
Philippines

Nepal

Sri Lanka
China

Top 5 Countries BRICS Countries Other Developing Countries

Source:
New Zealand
World 1 Ranking, 2019
Brazil
Bank's Doing Business 109 Bangladesh 176
Singapore 2 Russia 31 Pakistan 136
Denmark 3 India 77 Philippines 124
Hong Kong SAR, China
4 China 46 Nepal 110
India's
Korea, Rep. Doing5 Business Ranking
South Africa in Sub-Indicators
82 (2018
Sri Lanka & 2019)
100
Indonesia 73
Mexico 54

181
164 163 166
156 154
146 121
137
119 108
103
80
52
29 22 29 24
4 7

Dealing with Trading Starting a Getting Getting Enforcing Paying Protecting Resolving Registering
construction Across Business Credit Electricity Contracts Taxes Minority Insolvency Property
permits Borders Investors

Rank 2018 Rank 2019

Source: World Bank's Doing Business Ranking; 2018 & 2019

8 policy watch
 Factfile

India's Performance in Doing Business Ranking, 2019

Indicators Who sets the frontier Indicator Best India’s India’s

Performance Performance Performance
(frontier) (Mumbai) (Delhi)

Starting a Georgia; New Zealand Procedure (number) 1 10 10

business
New Zealand Time (days) 0.5 17 16

Slovenia Cost (% of income per 0 16.8 12.2

capita)

Australia; Colombia Paid-in minimum capital 0 0 0

(%  of income per capita)

Dealing with No economy was Procedure (number) 5 20 16

construction recognized as the best
permits performer as of May 1,
2018.

No economy was Time (days) 26 99 91

recognized as the best
performer as of May 1,
2018.

No economy was Cost (% of warehouse 0 6.6 4.2

recognized as the best value)
performer as of May 1,
2018.

Luxembourg; New Zealand; Building quality control 15 14 14

United Arab Emirates index (0-15)

Getting Germany; Republic of Procedure (number) 3 4 3

electricity Korea; United Kingdom

Republic of Korea; St. Kitts Time (days) 18 82 31

and Nevis; United Arab
Emirates

China; Japan; United Arab Cost (% of income per 0 10.4 46.4

Emirates capita)

Belgium; Ireland; Malaysia Reliability of supply and 8 7 6

transparency of tariff index
(0-8)

policy watch 9
Factfile
Indicators Who sets the frontier Indicator Best India’s India’s
Performance Performance Performance
(frontier) (Mumbai) (Delhi)

Registering Georgia; Norway; Portugal; Procedures (number) 1 9 9

property Sweden

Georgia; New Zealand Time (days) 1 85 55

Saudi Arabia Cost (% of property value) 0 7.5 9.1

No economy was Quality of land 30 9.5 8

recognized as the best administration index
performer. (0–30)

Getting credit Montenegro; Puerto Rico Strength of legal rights 12 9 9

(U.S.) index (0–12)

Ecuador; United Kingdom Depth of credit information 8 7 7

index (0–8)

Protecting China; Malaysia Extent of disclosure index 10 8 8

minority (0–10)
investors
Cambodia; Kenya Extent of director liability 10 7 7
index (0–10)

Djibouti Ease of shareholder suits 10 7 7

index (0–10)

India; Kazakhstan Extent of shareholder 10 10 10

rights index (0–10)

No economy was Extent of ownership and 10 8 8

recognized as the best control index (0–10)
performer.

Azerbaijan; France; Extent of corporate 10 8 8

Lithuania; Norway; Saudi transparency index (0–10)
Arabia; Taiwan, China

Paying taxes Hong Kong SAR, China; Payments (number per 3 13 11

Saudi Arabia year)

Singapore Time (hours per year) 49 277.5 273.5

Canada; Singapore Total tax and contribution 26.1 52.2 52.1

rate (% of profit)

No economy with both CIT Post filing index (0–100) 100 49.31 49.31
and VAT has reached the
best performance yet.

10 policy watch
 Factfile
Indicators Who sets the frontier Indicator Best India’s India’s
Performance Performance Performance
(frontier) (Mumbai) (Delhi)

Trading across Canada; Poland; Spain Time to export: Documentary 1 24 6

borders compliance (hours)

Austria; Belgium; Hong Time to export: Border 1 54 77

Kong SAR, China compliance (hours)

Hungary; Luxembourg; Cost to export: Documentary 0 75 80

Norway compliance USD

France; Netherlands; Cost to export: Border 0 250 253

Portugal compliance USD

Republic of Korea; Latvia; Time to import: 1 35 25

Malta Documentary compliance
(hours)

Bulgaria; France; Germany Time to import: Border 1 102 92

compliance (hours)

Iceland; Latvia; Cost to import: Documentary 0 100 100

United  Kingdom compliance USD

Armenia; Denmark; Estonia Cost to import: Border 0 340 323

compliance USD

Enforcing No economy was Time (days) 120 1445 1445

contracts recognized as the best
performer as of May 1,
2018.

No economy was Cost (% of claim) 0.1 31 31

recognized as the best
performer as of May 1,
2018.

No economy was Quality of judicial 18 10.5 10.5

recognized as the best processes index (0–18)
performer.

Resolving No economy was recognized Recovery rate (cents on 92.9 26.5 26.5
insolvency as the best performer as of the dollar)
May 1, 2018.

No economy was Strength of insolvency 16 8.5 8.5

recognized as the best framework index (0–16)
performer.

Ireland Time (years) 0.4 4.3 4.3

Norway Cost (% of estate) 1 9 9

Source: World Bank's Doing Business Ranking, 2019

policy watch 11
Factfile
Business Reform Action Plan (BRAP) - Trend in Ranking of States

Rank Rank Rank Rank Rank Rank

S. No. States / UTS S. No. States / UTS
2015 2016 2017 2015 2016 2017

1 Andhra Pradesh 2 1 1 19 Goa 19 21 19

2 Telangana 13 2 2 20 Punjab 16 12 20

3 Haryana 14 6 3 21 Kerala 18 20 21

4 Jharkhand 3 7 4 22 Jammu & Kashmir 29 32 22

5 Gujarat 1 3 5 23 Delhi 15 19 23

6 Chhattisgarh 4 4 6 24 Daman & Diu 23 24

7 Madhya Pradesh 5 5 7 25 Tripura 26 22 25

8 Karnataka 9 13 8 26 Dadra & Nagar Haveli 25 26

9 Rajasthan 6 8 9 27 Puducherry 20 26 27

10 West Bengal 11 15 10 28 Nagaland 31 27 28

11 Uttarakhand 23 9 11 29 Chandigarh 24 33 29

12 Uttar Pradesh 10 14 12 30 Mizoram 28 29 30

13 Maharashtra 8 10 13 31 Andaman & Nicobar Islands 25 35 31

14 Odisha 7 11 14 32 Manipur 28 32

15 Tamil Nadu 12 18 15 33 Sikkim 27 30 33

16 Himachal Pradesh 17 17 16 34 Arunachal Pradesh 32 31 34

17 Assam 22 24 17 35 Lakshadweep 36 34

18 Bihar 21 16 18 36 Meghalaya 30 34 34

Source: DIPP

For suggestions, please contact Neerja Bhattia, Corporate Communications at neerja.bhattia@cii.in

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12 policy watch