EASE OF DOING BUSINESS
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Construction permits, starting a business and enforcing contracts were expected to make big jumps. Instead it happened in paying taxes and resolving insolvency. According to FM, 42 reforms were completed but mostly not counted as implementation was lacking. 58 reforms had not been completed.
❡ I wouldn’t say India is a nice place yet to do business, but it's proceeding in the right direction. It is much easier than it was two years ago ❡ — WB director.
❡ States must invest in their capacity to implement change and transform the framework of incentives and regulation ❡
— ie. reforms in weak areas will help, but beyond that it is about better implementation in terms of quality, delivery, outcomes and perceptions. States must set aside monies for staffing, training, supervision and equipment to strengthen the administration, and root out corruption and malaise.
https://plus.google.com/100789863972538583352/posts/QL9qMUUhdXR
Interview: Amitabh Kant, CEO Niti Aayog
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At the start of NDA's term, PM remarked that India comes across as a highly complex, difficult and complicated place to do business. Rules, regulations and procedures had built up over years and were left unattended. Also India ranked very poorly in WB rankings on ease of doing business. These rankings are widely publicized and play a significant role in positioning and branding of a country. We understood that our ability to attract investors was severely affected.
Our single focus in the last 3 years has been to remove these barriers through many different actions. To make states easier for business, govt initiated an annual competition among states and union territories. Fortunately CMs and state bureaucracy were spurred into intense rivalry. Many states made dramatic improvements—the best outcome was that mineral rich states of Jharkhand and Chhattisgarh competed heavily and came fourth and fifth! Govt was so pleased that Niti Aayog now runs a competition on health, education, water management and agriculture.
How to break into Top 50
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1. Registering property
Critical challenge here is that land records are spread across many departments, such as sub-registrar's office, land records, banks for mortgages and courts in cases of disputes. A buyer has to visit every single department separately to find records. We need massive digitization at every dept and then link records together using a unique ID.
2. Enforcing contracts
Establishment of dedicated commercial courts at the district court level in Delhi and Mumbai can go a long way to reduce hassle involved in resolving disputes. This is slowly happening, but at same time courts must introduce online electronic case management systems and rigorously abide by the civil procedure code limit of a maximum of three adjournments per case.
3. Starting business
Despite our reforms, we continue to be ranked poorly because other countries have reformed faster. We need to further integrate processes into a single form — such as by converging GST with PANTAN registration, merging EPFO and ESIC, and shops and establishment registrations. We can also cut layers of inspections, such by switching to real-time registration and risk-based verification.
4. Trading across borders
India has implemented far-reaching reforms but private sector still has not felt the impact. We need to do extensive alteration in our processes to ensure all approving authorities (in the customs clearance process) deliver seamless online approvals. Bringing shipping firms into the system will deliver faster services.
5. Construction permits
There is scope to do more. Reforms with require integration of 'no objection certificate' depts of centre, states and municipal corps; single windows for online approvals and service delivery; use of GIS to provide transparent and conclusive information on permissions; and risk based principles to trim number of inspection and approvals.
======================
Construction permits, starting a business and enforcing contracts were expected to make big jumps. Instead it happened in paying taxes and resolving insolvency. According to FM, 42 reforms were completed but mostly not counted as implementation was lacking. 58 reforms had not been completed.
❡ I wouldn’t say India is a nice place yet to do business, but it's proceeding in the right direction. It is much easier than it was two years ago ❡ — WB director.
❡ States must invest in their capacity to implement change and transform the framework of incentives and regulation ❡
— ie. reforms in weak areas will help, but beyond that it is about better implementation in terms of quality, delivery, outcomes and perceptions. States must set aside monies for staffing, training, supervision and equipment to strengthen the administration, and root out corruption and malaise.
https://plus.google.com/100789863972538583352/posts/QL9qMUUhdXR
Interview: Amitabh Kant, CEO Niti Aayog
══════════════════════════
At the start of NDA's term, PM remarked that India comes across as a highly complex, difficult and complicated place to do business. Rules, regulations and procedures had built up over years and were left unattended. Also India ranked very poorly in WB rankings on ease of doing business. These rankings are widely publicized and play a significant role in positioning and branding of a country. We understood that our ability to attract investors was severely affected.
Our single focus in the last 3 years has been to remove these barriers through many different actions. To make states easier for business, govt initiated an annual competition among states and union territories. Fortunately CMs and state bureaucracy were spurred into intense rivalry. Many states made dramatic improvements—the best outcome was that mineral rich states of Jharkhand and Chhattisgarh competed heavily and came fourth and fifth! Govt was so pleased that Niti Aayog now runs a competition on health, education, water management and agriculture.
How to break into Top 50
1. Registering property
Critical challenge here is that land records are spread across many departments, such as sub-registrar's office, land records, banks for mortgages and courts in cases of disputes. A buyer has to visit every single department separately to find records. We need massive digitization at every dept and then link records together using a unique ID.
2. Enforcing contracts
Establishment of dedicated commercial courts at the district court level in Delhi and Mumbai can go a long way to reduce hassle involved in resolving disputes. This is slowly happening, but at same time courts must introduce online electronic case management systems and rigorously abide by the civil procedure code limit of a maximum of three adjournments per case.
3. Starting business
Despite our reforms, we continue to be ranked poorly because other countries have reformed faster. We need to further integrate processes into a single form — such as by converging GST with PANTAN registration, merging EPFO and ESIC, and shops and establishment registrations. We can also cut layers of inspections, such by switching to real-time registration and risk-based verification.
4. Trading across borders
India has implemented far-reaching reforms but private sector still has not felt the impact. We need to do extensive alteration in our processes to ensure all approving authorities (in the customs clearance process) deliver seamless online approvals. Bringing shipping firms into the system will deliver faster services.
5. Construction permits
There is scope to do more. Reforms with require integration of 'no objection certificate' depts of centre, states and municipal corps; single windows for online approvals and service delivery; use of GIS to provide transparent and conclusive information on permissions; and risk based principles to trim number of inspection and approvals.
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- Registering property reforms
REPLY Nov 3, 2017 - Commentary on changes thus far
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PM Modi--"WB ranking is an indicator of good governance, of quality of public policies and transparency of the processes. It is especially critical for small businesses, to make them competitive, as this sector provides the bulk of our employment. Though we have risen to 100th in rankings, there are reforms that have already happened but needs gestation and stabilisation before WB takes note of them. GST is a modern tax reform that will bring transparency and predictability.
"Over the last three years, business regulations were systematically and critically evaluated to understand the pain points. An extensive exercise was undertaken to redesign laws and re-engineer government processes to make business environment simpler and more conducive. There have been many structural changes, new regulations as well as a change in the bureaucracy's mind-set.
"We have resolved a number of regulatory and policy issues facing businesses and companies. Manufacturing and infrastructure sectors are being given a big push. Foreign direct investment reforms have taken place in 21 sectors. Significant reforms have taken place in defence, railways, construction, insurance, pension, civil aviation and pharmaceuticals."REPLY Nov 6, 2017 - Shaurya Doval, India Foundation & MD Gemini Financial Services
China, our immediate competitor, on the other hand, has maintained its ranking at 78 from 2017. Catching up will not be easy. For one, other countries are working to improve their rankings. Also reforms will be much tougher, requiring major capacity building by States and taking actions to change realities and perceptions.
There is room for optimism. Most improvements in indicators are still works in progress or not credited, and there is clear intent and capacity of govt to go further and harder to achieve its goals. Global investors will take note of these and future improvements in ease of doing business, in assessing their cost of capital. Deep structural changes elsewhere in the economy together with improved competitive environment and reduced cost of capital implicit in doing business in India, will create opportunities investment, infrastructure, growth and employment.
REPLY Nov 16, 2017 - What next
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Work will be done to gain recognition of 122 reforms which were not recognised this year by the World Bank. Department is working on 90 more reform measures, such as related to commercial courts. GST should have a substantial, positive impact on the ranking next year.
Dispute resolution — actions likely---------------------------------------------------
Slash threshold for commercial courts to hear cases
Reduce civil jurisdiction of High Court in Delhi
Set up New Delhi Centre for Arbitration
Encourage full roll-out of commercial courts in all states
Trim discriminatory powers of judges
Appointment of experts
Online management of cases
Further remove archaic and outdated laws
Stronger contract law — simplify public works contracts
Make special performance the rule (damages exception)
Court fees refunded if mediation successful (proposal)
Strict timelines for cases — 2 year limit, 3 adjournments limit
India scored highly in higher court institutions (scored 4.5/ 5) and ADRM (2.5/ 3), but poorly in management of cases (scored 1.5/ 6). Govt is aiming to bring down costs from 31% of claims, to 9% of OECD countries, and average time to resolution from 1500 days to below 550 days of OECD.
Govt will increase scope of commercial adjudication for faster & effective disposal. Alternate Dispute Resolution Mechanism is available before a case is filed. There is a suggestion that the court fees will be refunded if a case is settled through mediation.
Commercial Appellate Division of High Court Act 2015 allows states to set up commercial courts, for disputes over Rs.1 cr. Govt is proposing to reduce the Rs.1cr starting value to mere Rs.3lakh, reduce civil jurisdiction of High Court in Delhi and set up a New Delhi Centre for Arbitration. Many states have commercial courts like Chhattisgarh, Gujarat and Telangana, where enabling provisions were incorporated into state laws. UP will raise 13 commercial courts. CM said UP will become more investor friendly, as earlier they used to run around civil courts and high courts for years to get resolution.
Stronger contract law is in pipeline with emphasis on enforceability. Special Relief Act will to be modified, to make special performance the rule and damages the exception. It will reduce discretionary powers of judges, but empower courts to appoint experts to assist. It will set a limit of two years for the disposal of suits and recovery of immovable property. Public works contracts are specifically targeted, so a stable, predictable business environment is created, boosting investment in infrastructure.
http://www.financialexpress.com/india-news/ease-of-doing-business-good-news-coming-modi-government-to-clear-new-contract-disputes-laws/935102/lite/
REPLY Nov 16, 2017 REPLY Jan 25, 2018
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