CII proposes 10-point roadmap for Ease of Doing Business

Context: Ahead of the Budget, the Confederation of Indian Industry (CII) has suggested a 10-point agenda to drive ease of doing business reforms. While India has remained focused on improving ease of doing business (EoDB), there is a need to maintain the momentum especially in certain specific areas.

What is Ease of Doing Business?

• Ease of Doing Business (EoDB) is an index developed by the World Bank Group.
• What does it do?
  • It measures the regulatory environment of a country and its impact on the ease with which businesses can operate. 
  • It assesses how conducive a country's policies, regulations, and administrative practices are for starting, running, and closing a business.
• In 2021, the World Bank discontinued the EoDB index following allegations of data irregularities and ethical concerns during its preparation.
  • However, its principles continue to influence global reforms and economic policies.

CII recommendations for Ease of Doing Business Reforms

• Mandatory Use of National Single Window System (NSWS) for Approvals:
  • Integrating all central ministries into the NSWS within six months, with states to follow in a phased manner. 
  • A dedicated central budget to incentivize states to adopt the system. This will ensure transparency and faster processing.
• Time-Bound Services with Statutory Backing:
  • A new Act to impose statutory obligations on public authorities to process industry applications and grievances within set timelines. 
  • Provisions for deemed approvals beyond deadlines are also suggested.
• Strengthening Dispute Resolution Mechanisms:
  • Expanding commercial courts and increasing reliance on Alternative Dispute Resolution (ADR) methods like mediation and arbitration. 
  • Prioritising establishment of the Mediation Council of India and the Arbitration Council of India.
• Expanding National Judicial Data Grid (NJDG):
  • NJDG’s scope should include tribunal cases to manage and reduce pendency effectively. Tribunals constitute a significant share of unresolved cases.
• Unified Environmental Compliance Framework:
  • A single framework to consolidate environmental compliance requirements. 
  • Existing laws like the Water Act and Air Act should be incorporated into the Environmental Protection Act to centralise regulations. 
  • Performance-based incentives could reward companies exceeding environmental standards.
• Facilitating Land Access:
  • States should develop an Online Integrated Land Authority to streamline land records, digitise land banks, and provide dispute information. 
  • The India Industrial Land Bank (IILB) should evolve into a National Level Land Bank with central budgetary support.
• Simplified Labour Compliances:
  • Implementation of the four Labour Codes is essential to ease compliance. 
  • Additionally, the Shram Suvidha Portal should become a centralised platform for all labour law compliances across central and state levels.
• Improving Trade Facilitation:
  • The Authorised Economic Operator (AEO) program should be simplified with enhanced benefits like:
    • extended duty payment periods
    • self-declared renewals
    • easier access for MSMEs.
• Aligning Metrology Rules with Global Standards:
  • Synchronising allied legal metrology rules with international standards. 
  • Imported equipment certified by OIML labs should be exempt from additional approval processes.
• Addressing Tax Dispute Pendency: The government should reduce income tax litigation by:
  • Unclogging cases at the Commissioner of Income Tax (Appeals) level. 
  • Improving ADR mechanisms like Advance Pricing Agreements and Dispute Resolution Schemes.

The 10-point agenda can help create a predictable, transparent, and business-friendly environment. By implementing these recommendations, India can strengthen its position as a global investment destination while boosting domestic economic activity.