71 Years Of Independence: Corporate India Looks At More Mature And Modernized Approach In Doing Business
The government, with its beneficial reforms, has placed India at the threshold of ubiquitous growth
Being the most promising sector and one of the largest contributors to the Indian economy, the Corporate India has always been looking at more mature and modernized approach in doing business. Under the present government, India has positioned itself among the top 100 nations club in terms of business friendliness for the first time ever, as perceived by the World Bank. This jump has been enabled majorly due to India's ability to handle insolvency cases. The World Bank has also recognized India's efforts by stating that the country is one of the top 10 improvers in this year's assessment, having implemented reforms in 8 out of 10 Doing Business indicators.
In the late 1970s, the government eased restrictions on capacity expansion for incumbent companies, removed price controls, reduced corporate taxes and promoted the creation of small-scale industries in large numbers. And today, India’s agenda is mainly on major reforms for improving business environment which is a strong indicator of the consistent efforts by the government in the past few years. It has adopted 37 business reforms in the last 15 years. Commendably, nearly half of these reforms have been implemented in the last 4 years. In India, external commercial borrowings (ECBs), or commercial loans from non-resident lenders, are being permitted by the government for providing an additional source of funds to Indian corporates.
Although the country still faces cumbersome processes while starting a new business. With the help of digitalization, and future ready e-solutions, we should soon be looking at effortless options for this. As the technology is already opening up numerous business opportunities, what we await is the same ease for tax / business registration.
From the perspective of travel and tourism, we are thriving in our industry specific norms that the government has initiated. We have to thank the valuable strategy that has enabled sourcing of multiple unused resources that the government has identified and implemented for the growth of travel and tourism. These benefits are not just restricted to older players, but are equally profitable to new startups as well.
One right step towards tax reform is the introduction of GST. It is common knowledge that GST has helped and designed our tax structure for a simpler and easier process. Indeed, ‘One Nation, One Tax’ is the right slogan for this change. GST implementation led to increased efficiency for businesses by reducing their transportation time, on account of absence of state barriers. Recently, it is announced that the GST Council is considering to bring jet fuel (ATF) under GST realm. However, fitting the same in 5, 12, 18 and 28 per cent GST tax slabs seems deterrent. As currently, the Centre levy 14% excise duty on ATF and States charge around 30% sales tax or VAT.
On the other hand, we may look at another advantage, the increased percentage of transparency. The corporate pays according to the tax slabs it falls in, obliterating payment to multiple regimes listed under state and union government separately. Therefore, we can successfully infer that the government, with its beneficial reforms, has placed India at the threshold of ubiquitous growth. With revolutionary reforms for all– small, middle and large cap- Corporate India is expecting tremendous possibilities.
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