Ease of Doing Business: An Analysis

Ease of Doing Business: An Analysis

May 29, 2018 0 By Xamnation Editor

World banks ease of doing business report of 2018 ranked India at 100/190 countries. This is a commendable improvement over the 2017 when India was at 130.

Measures taken by gov. to improve case of doing business:

  • Infusion of capital into public sector banks which would spur investment
  • Insolvency & Bankruptcy Code (IBC) & establishment of associated bodies which helps banks better deal with the existing huge NPAS. It also helps strained firms with liquidation.
  • Making the process of obtaining construction permits online improved the efficiency & saves time of investors to comply with various labor laws
  • Loosening the restrictions by allowing greater percentage of foreign investment in various sectors without government approvals.
  • National Investment & Infra structure Fund (NIIF) setups encourage investment upto 49%

Issues:

  • Gross border mergers & Acquisitions in restricted
  • Bureaucratic delays & corruption still Examples: permits ,Env clearance , electricity connection , water supply etc,
  • Land acquisition process is still a contentious issue
  • Complicated labour laws Ex: Firms are concerned about the regulations for firing an employee.
  • Absence of well established structures like DVR share issue of share at discount etc.

Measures to improve the Existing situation:

  • Government should work on simplifying the land acquisition & labor laws
  • Introduction of Hybrid security which would help founders to raise money from invertors without losing control.
  • Reforms must be brought in place to fast track commercial disputes.

WB reports only consider EDB in Bombay & Delhi and it’s a commendable step of government to proactively take up EDB assessment in various other cities of the country.

EDB is very crucial as this is the times when government is pitching investors with initiatives like “Make In India , “Maximum Governance , Minimum Government”. Government needs to work on the aforementioned issues to reach the target of a below 50 rank in WB EDB ranking by 2022.