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Free India From Over-regulation
India has to go beyond just policymaking and planning if it has to climb up the Ease of Doing Business ranking
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The ‘ease of doing business’ (EoDB) index ranks 190 countries based on the 10 indicators carrying equal weightage. Last year, India jumped to reach 100th position. But by 2022, or even before, India aims to find a spot amongst the Top 50 countries in this list. Which means India needs to do a significant amount of work across all the measurable indicators. These include increasing the tax base, improving cross-border trade, improving credit ratings, easing norms on registration of properties, faster construction permits, easier contract enforcement among others.
Freedom from Bottlenecks
In a recently concluded meeting between the private operators and the Department of Telecommunications (DoT) on ‘how to improve ease of doing business’ in the telecom sector, they listed out a number of steps that are urgently required from the governments side to improve the overall business environment. These include, providing level-playing field to private operators in public projects; imposing lower levies on all public projects awarded to private operators; rationalising tender-conditions (turnover and prior experience) to encourage startups in the telecom sector; providing low cost finance to entrepreneurs who are engaged to execute public projects among others.
“The draft National Digital Communications Policy 2018 proposes to address most of the telecom operators issue to achieve $100 billion investment but operators want to know by when it will be implemented,” says Rajan S. Mathews, Director General, COAI. Among more specific steps, the telecom operators want the government to reduce the spectrum usage charge to 1 per cent, redefine adjusted gross revenue as per TRAI recommendation, fix GST at a uniform rate of 12 per cent, allow tax-free bonds, impose ‘same-service-same-rule for over-the-top (OTT) operators among others.
Freedom From Tedious Approvals
For several years, the real estate sector was plagued with reduced launches and muted demand specifically in the residential space. The roll out of RERA or the Real Estate Regulation and Development Act is getting stabilised and is expected to usher transparency in the sector, further protecting the interest of home buyers in the longer run. Imposition of the GST regime too usher in the winds of positive changes to the home buyers, signs of which were evident in the first half of 2017 when the residential sector received investments of over Rs 16,000 crore. Even the PE investments crossed $4 billion mark in 2017. What else is required now? Ashish R.Puravankara, MD, Puravankara, says, “The much awaited “Single Window Clearance”, be introduced to faster approvals and plan sanctions. This would lead to the average construction time cycle crashing and buyers getting their homes earlier. This policy in conjunction with RERA and GST will usher in a new era of accountability and transparency into the market.”
J.C. Sharma, Vice Chairman and MD, Sobha, commends the measures taken by the Central government for the sector. “It is now time for the State governments to rise to the occasion and bring in the reforms to address land and approval related issues as well as ensure proper implementation of RERA, fulfilling the promise of ‘housing for all’ initiative,” he says.
Freedom From Complex Taxation
The auto industry is a key sector contributing nearly 26 per cent to industry GDP and virtually 50 per cent to the manufacturing GDP in 2017. The government wants two key contributions going forward -- faster adoption and manufacturing of hybrid and electric vehicles (EV) and to jump to BS VI emission norms. “We will require a reduction on GST for EV products from 12 to 5 percent, and an import duty cut on ‘completely knocked down’ kits for EV. We need tax rationalisation for sure,” says Y. K. Koo, MD & CEO, Hyundai Motor India.
Rockman Industries, manufacturers of alloy-wheels for the two-wheelers in India, says the industry wants freedom from multi-step clearances. “There has been a significant impetus to the auto sector as a result of the recent reforms, including GST. To further fuel this growth, there is need to ease the land-acquisition process, initiate labour reforms, and stronger implementation of the one-window clearance policy. The industry will get additional boost with these transformative steps,” says Ujjwal Munjal, MD, Rockman Industries.
Overall, India has already initiated many steps towards improving its future EoDB rankings. How fast the steps will translate into actions holds the key to improved rankings.