India’s Ranking in the Ease of Doing Business Index- Sectors that need improvement 

Last Updated at: October 16, 2019
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India’s Ranking in the Ease of Doing Business Index- Sectors that need improvement

While last year we were rejoicing India’s jump to the 100th place in the World’s Bank Ease
of Doing Business rankings, this year India did remarkably well by moving up 23 spots to get the 77th rank. This leap is one of the highest of all countries and among the BRICS nations, India’s growth is only next to China.

It is said that the factors that led to such a high-rank leap were primarily improvements in the construction permit mechanism and trading logistics across borders that reduced storage and transit time. With the Insolvency and Bankruptcy Code being enacted and the adjudicatory mechanism set in place, creditors were given greater security. We also continue to remain at the top for protecting minority interests.

However, in the following segments, India lags behind most nations and does not feature in
the top 100 list:

Paying taxes
This parameter assesses the ease and compliance of the taxation mechanism in a country and the business taxation rates across countries. With multiple administration agencies, detailed requirements of maintaining the book of accounts, registration processes for various taxes, quarterly and monthly filing requirements along with administrative and adjudicatory machinery that is complex and layered, India needs to simplify its tax regime to improve its ranking in this segment. During the World Bank assessment, GST had only just been introduced and was not largely accounted for. However, with greater synchronization and e-approvals of GST invoices, there is hope of a rank jump in this segment. We also have one of the highest tax rates (averaging around 30 per cent), while the average tax rate in most global economies is less than half of what businesses pay in India.

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Enforcing contracts
A recent report stated that we have one judge in India for every 73,000 people, making the ratio abysmally low. It is also believed that to clear the pending backlog of civil and criminal cases in India, it is likely to take 30 years. Companies in India often get embroiled in labour, taxation, and contract related matters and have to fight for years to get to the stage of final adjudication. Similarly, those that want to enforce specific terms of the contract, find it difficult to go through the rigmarole of court processes. While establishing Commercial Courts is a great move to provide quick legal remedies to corporate segments, it’s ability to function as a fast track court remains to be seen.

Improving the process for property registration
Currently, for registration of immovable properties, a host of laws – both central and state-
specific apply. What adds to the time involved are stamp duty provisions, various approvals
and administrative delays. With digitization, and the government planning to use Google
Maps and its integrated technologies to register land and house properties, India may be able to outperform its competitors and make access to property simpler. The government has already introduced norms like sanction of loans to the small and medium enterprises within an hour, simplified GST registration and digitization of documents.

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India’s Ranking in the Ease of Doing Business Index- Sectors that need improvement 

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While last year we were rejoicing India’s jump to the 100th place in the World’s Bank Ease
of Doing Business rankings, this year India did remarkably well by moving up 23 spots to get the 77th rank. This leap is one of the highest of all countries and among the BRICS nations, India’s growth is only next to China.

It is said that the factors that led to such a high-rank leap were primarily improvements in the construction permit mechanism and trading logistics across borders that reduced storage and transit time. With the Insolvency and Bankruptcy Code being enacted and the adjudicatory mechanism set in place, creditors were given greater security. We also continue to remain at the top for protecting minority interests.

However, in the following segments, India lags behind most nations and does not feature in
the top 100 list:

Paying taxes
This parameter assesses the ease and compliance of the taxation mechanism in a country and the business taxation rates across countries. With multiple administration agencies, detailed requirements of maintaining the book of accounts, registration processes for various taxes, quarterly and monthly filing requirements along with administrative and adjudicatory machinery that is complex and layered, India needs to simplify its tax regime to improve its ranking in this segment. During the World Bank assessment, GST had only just been introduced and was not largely accounted for. However, with greater synchronization and e-approvals of GST invoices, there is hope of a rank jump in this segment. We also have one of the highest tax rates (averaging around 30 per cent), while the average tax rate in most global economies is less than half of what businesses pay in India.

Ask for Free Legal Advice

Enforcing contracts
A recent report stated that we have one judge in India for every 73,000 people, making the ratio abysmally low. It is also believed that to clear the pending backlog of civil and criminal cases in India, it is likely to take 30 years. Companies in India often get embroiled in labour, taxation, and contract related matters and have to fight for years to get to the stage of final adjudication. Similarly, those that want to enforce specific terms of the contract, find it difficult to go through the rigmarole of court processes. While establishing Commercial Courts is a great move to provide quick legal remedies to corporate segments, it’s ability to function as a fast track court remains to be seen.

Improving the process for property registration
Currently, for registration of immovable properties, a host of laws – both central and state-
specific apply. What adds to the time involved are stamp duty provisions, various approvals
and administrative delays. With digitization, and the government planning to use Google
Maps and its integrated technologies to register land and house properties, India may be able to outperform its competitors and make access to property simpler. The government has already introduced norms like sanction of loans to the small and medium enterprises within an hour, simplified GST registration and digitization of documents.

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Avani Mishra is a graduate in law from the National Law Institute University, Bhopal. She qualified the Company Secretary course with an All India Rank 1 and is a recipient of the President’s Gold Medal for her academic distinctions. She also holds a B.Com degree with a specialization in Corporate Affairs and Administration.