AIR Spotlight is an insightful program featured daily on the All India Radio News on air. In this program, many eminent panellists discuss issues of importance which can be quite helpful in IAS exam preparation.
This article is about the discussion on: ‘Ease of Doing Business’.
Participants:
- Sushma Ramachandran – Business Journalist.
- S. Rangabashyam – Anchor.
Context – India has made significant strides in improving the ease of doing business in the country over the past few years. The government’s efforts to simplify regulations, reduce bureaucracy, enhance transparency and promote entrepreneurship have created a conducive ecosystem for businesses to thrive.
National Single Window System (NSWS)
The GoI launched the National Single Window System in September, 2021 for investors and businesses, especially micro, small and medium enterprises (MSMEs) to improve Ease of Doing Business (EoDB). This single window portal is designed to be a one-stop-shop for investors to simplify tedious bureaucratic procedures for getting approvals, registrations and clearances.
- NSWS is a one-stop digital platform that allows investors to apply for various approvals and licences for commencing a business in the country.
- It aims to streamline the business registration processes by eliminating the need for multiple applications across various portals or ‘bureaucratic windows’ offline.
- The portal offers a single dashboard, allowing businesses to apply for clearances, track progress and respond to queries.
- The Know Your Approval (KYA) module on NSWS guides investors to identify approvals required for their business based on a dynamic intuitive questionnaire.
- The portal has made business much easier for both domestic industry as well as foreign investors. However, not all the states and UTs are on board on the portal – it is a process that is improving day-by-day. NSWS is a huge step forward as far as ease of doing business is concerned.
Role of GST for Ease of Doing Business in India
The Goods and Services Tax, India’s biggest tax reform since independence came into effect from 1st July, 2017. Conceived on the principle of One Nation, One Tax, One Market, the tax subsumes 17 central and state levies and also 23 cesses, and has brought the country under one tax regime.
- GST has made doing business easier by bringing down barriers across the country- it has improved the flow of commodities throughout the country, thereby helping in improving the efficiency and productivity of the economy as a whole.
- The GST regime has also positively affected the prices and costs of goods and services to end consumers, along with helping companies optimise their supply chains.
- This technologically driven tax reform has been effective for both businesses and taxpayers. The number of taxpayers has gone up from 66 lakhs in 2017 to 1.4 crores in 2022.
- The National Council of Applied Economic Research (NCAER) had estimated that the implementation of GST will boost GDP of India by 1-2%. There has been a positive impact of GST implementation in the country in terms of the revenue inflows. The gross GST collections crossed the 1.75 lakh crore mark for the first time in April 2023.
Disinvestment of PSUs – AIR India
The business of the government is not to be in the business – the governments are best in making laws, regulations and maintaining law and order.
- With the disinvestment of Air India, the government has come out of the aviation sector and is also looking for disinvestment in other sectors.
- There are a number of PSUs that are no longer profitable, as they are facing stiff competition from private companies in the same sector. Fiscal support to sick PSUs put a burden on the economy.
- The government is looking to disinvest Bharat PetroleumCorporation Limited (BPCL), as well as host of other smaller companies – Container Corporation of India. Such disinvestments will boost the country’s business and economic prospects.
Also read – Disinvestment Policy in India and DIPAM.
Digitisation of Economy –
Digitisation of the economy where India has become a world leader has improved the ease of doing business in a big way.
- Digital payments have registered an unprecedented growth in India. Easy and convenient modes of digital payment such as Bharat Interface for Money-Unified Payments Interface (BHIM-UPI), Immediate Payment System (IMPS), Prepaid Payments Instruments (PPIs) and National Electronic Toll Collection (NETC) system have registered substantial growth and have transformed digital payment ecosystem.
- UPI has emerged as a preferred mode of payment and has recorded 886.3 crore digital payment transactions with the value of Rs 14.15 lakh crore in April, 2023.
- India’s digital payment transactions in 2022 were more than the combined digital payments of the four big economies of the world – US, UK, Germany and France.
Scrapping of 2000 obsolete laws for British-era-
The GoI has repealed around 2000 obsolete laws from the British-era to improve the ease of doing business in India
- The GoI also passed the Companies (Amendement) Bill, 2020 to amend the companies act (2013) and decriminalise various compoundable offences as well as promote ease of doing business in the country. The decriminalisation is only for minor, procedural and technical falls which do not involve fraud, injury to the public interest, or non- compoundable offences.
Insolvency and Bankruptcy Code, 2016
The Insolvency and Bankruptcy Code (IBC), 2016 is the umbrella legislation for insolvency resolution of all entities in India – both corporate and individuals.
- The Government implemented the Insolvency and Bankruptcy Code (IBC) to consolidate all laws related to insolvency and bankruptcy and to tackle Non-Performing Assets (NPA), a problem that has been pulling the Indian economy down for years.
- The IBC was enacted as a critical building block of India’s progression to a mature market economy. It addresses the growing need for a comprehensive law that would be effective in resolving the insolvency of debtors, maximising the value of assets available for creditors, and easing the closure of unviable businesses.
- The IBC was introduced by the GoI in 2016 and was amended twice. Once a long drawn, painful process of closure of business is now a faster and more efficient resolution process.
Also read – Insolvency and Bankruptcy Board of India.
Mudra Scheme – Ease of Doing Business for MSMEs
Pradhan Mantri Mudra Yojana (PMMY) is among the self -employment and entrepreneurship promotion schemes of the government launched in 2015.
Also read – Micro, Small and Medium Enterprises (MSME).
Conclusion – The GoI has introduced various reforms to improve ease of doing business in the country, these reforms focus on reducing the time taken for starting a business, fast tracking various permissions required by the businesses, facilitating faster imports and exports, speeding up resolution of commercial disputes amongst others.
Read previous AIR Spotlight articles here.
AIR Spotlight: Discussion on ‘Ease of Doing Business’:- Download PDF Here
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