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Making India the Top Destination for Ease of Doing Business
As per the World Bank ‘Ease of Doing Business 2018 Rankings’, India has jumped 30 points and has successfully reached the top 100 club. This is proof that the reform agenda constituted by the Government and the subsequent policy initiatives have borne fruit. Now, India aims to be in the top 50.
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The Indian Economy has finally arrived on the world stage. Global conversations surrounding India have notably increased in the last few years, mostly as a result of over 109 new initiatives taken by the Government, many of which are directed towards the vision of a new well-connected digital India. As per the World Bank ‘Ease of Doing Business 2018 Rankings’, India has jumped 30 points and has successfully reached the top 100 club. This is proof that the reform agenda constituted by the Government and the subsequent policy initiatives have borne fruit. Now, India aims to be in the top 50.
Though we continue to improve on the ease of doing business index, challenges like fluctuating commodity prices and exchange rates, and lack of basic infrastructure continue to persist. Also, doing business in a country like ours, with its cultural, geographical, demographical diversity is not an easy endeavor. To achieve the top 50 position, India must move from policy reforms to actionable benefits.
What do Indian corporate and business sectors need to achieve the next step in becoming a global economy? Here is a quick list
Ease of Taxation – Improvements in GST
The Goods and Services tax was a landmark reform and the idea of one nation, one tax is a step in the right direction. The introduction of GST has made it easier for people to start a business, and ITC (Input Credit) mechanism ensure an uninterrupted flow of cash for businesses and reduced price of goods/services for the end consumers. But the path has not been easy and despite considerable progress and efforts there is still a long way to go. As GST stabilizes and businesses are now used to the taxation changes and different norms, there is still room for improvements. Further simplification of returns processes, addressing concerns for India’s huge MSME/SME sectors etc. are necessary steps that need to be taken to reap the kind of benefits envisioned during GST inception.
Simplified Infrastructure and Government frameworks
India has been working on its infrastructure and is slated to make significant reforms in the next few years. Better roads and transportation facilities speed up the transportation of goods and brings up the efficiency of the business. A big challenge that many multinational companies face in India is mining through the convoluted governance framework, intertwined between the Central and the State Government. This is a huge task for many Global entities that belies the attractiveness of the expanded consumer market because of the policy and logistics nightmares. It's not uncommon for different State Governments to have vastly differing legislations on labor, land acquisition, commercial taxes and priority sector categorization for incentives. Coupled with a comparatively weak infrastructure, extreme climatic conditions and a huge risk of bribery and corruption, makes India a tough cookie to crack. Thus, just like in case of taxation, there needs to be simplification of other rules as well. Introduction of E-Way bills and changing regulatory frameworks around inter/intra state bill movements for instance is a good example of unified policies that will help in further building the right frameworks.
Enhanced Cross Border Functionalities across the varied business segments
India can further improve ranking by integrating different processes across segments. For example, we can further integrate registration processes into a single form by converging GST with PAN/TAN registration. EPFO and ESIC can also be integrated and shops and establishment registration processes.
Further Technology Enhancement
The Government has taken innumerable steps to enhance digital adoption in India. From Digital India to network infrastructure, Aadhaar enablement and Digi-lockers, there has been considerable progress on the technology side. The next step is to think implementation. For example, consider Healthcare. Healthcare is one of the most complex challenges of our time. We need approximately $245 billion by the year 2034 to improve healthcare delivery through traditional methods. Is it possible to use existing technology investments and initiatives (mobile phones and high-speed data networks, Aadhaar and digital health records) to provide a different solution? A solution that will provide better access to quality healthcare to those in need despite the physical infrastructure hurdles. Such an initiative could transform public health, increase return of investments and showcase actual implementation of various Government initiatives.
All in all, India has the potential to achieve its rightful place as an influential global leader. With lower production costs, easy ways to procure raw materials, a young workforce and progressive yet flexible atmosphere, we’re on the right path and ease of doing business that is well within our reach - we just need to concentrate on the bigger picture.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.