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Doing Business In India The “Long Jump”

[box type=”shadow” ]The main factor to economic progress is making the country business friendly. And if India has occupied a place in the top 10 improvers in the list of Ease of Doing Business, it is because of the improvement in most of the 10 indicators set for the rating. The Cleaning Industry can definitely gain from this perception of our country’s capacity to drive business and reforms.[/box]

Today, India stands at 77 in Doing Business 2019, released by the World Bank, making it highest ranking South Asian nation. From a leap of 30 places last year, it continued its leap by 23 points this year. Prime Minister Narendra Modi had tweeted that we are unwavering in all our commitments towards economic reform which will ensure an environment that fosters investment and opportunities.

This is the second consecutive year for which India has been recognized as one of the top improvers. India is also the first BRICS and South Asian country to be recognized as top improvers in consecutive years. India has recorded the highest improvement in two years by any large country since 2011 in the Doing business assessment, according to the Report.

India is among the top 25 on three indicators: Getting Electricity, Protecting Minority investors, and getting credit and top 80 in another two indicators: Dealing with Construction Permits and Trading Across Borders.

“This is a spectacular performance. No country of this size and complexity has achieved this jump of 65 positions in three years. It was Prime Minister Narendra Modi’s vision to reach within top 50 position in five years. It is very important to reach within top 25 in three years,” said Amitabh Kant, CEO of Niti Aayog.

The Doing Business assessment provides objective measures of business regulations and their enforcement across 190 economies on ten parameters affecting a business through its life cycle. The DBR ranks countries on the basis of Distance to Frontier (DTF), a score that shows the gap of an economy to the global best practice. This year, India’s DTF score improved to 67.23 from 60.76 in the previous year.

The country’s transformation has been the result of sustained efforts by a number of implementing departments, spanning central, state and municipal governments, to improve on their respective indicators. Technology adoption and integration of data play a crucial role in achieving further improvement.

It was reported two years back that Small and Medium enterprises engaged in manufacturing of cleaning equipment such as scrubbers, wipers, twist mops and street brooms have seen an uptick of up to 30 per cent in business since the Swachh Bharat Abhiyan, or Clean India Mission, was launched.

While the domestic market for sophisticated cleaning equipment and products were increasing, it has been found necessary to bring in international companies to look at India to manufacture equipment and tools. The time is now ripe for “Making In India”.

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No country of this size and complexity has achieved this jump of 65 positions in three years… It is very important to reach within top 25 in three years

Amitabh Kant, CEO of Niti Aayog[/box]

Indicator-wise highlights of India’s performance are:

Construction Permits –

a. Procedures reduced from 37 to 20 in Mumbai and from 24 to 16 in Delhi
b. Time reduced from 128.5 to 99 days in Mumbai and from 157.5 to 91 days in Delhi
c. Building quality control index improved from 12 to 14 in Mumbai and 11 to 14 in Delhi
d. Cost of obtaining construction permits reduced from 23.2 percent to 5.4 percent
e. DTF score improved from 38.80 to 73.81

Trading Across Borders –

a. Changes in time and cost are as follows:
b. Robust Risk Management System has reduced inspections significantly
c. e-Sanchit allows traders to file all documents electronically
d. Time and cost to export reduced through the introduction of electronic self-sealing of container at the factory

Starting a Business —

• Procedures reduced from 11 to 10 in Delhi and 12 to 10 in Mumbai
• Time reduced from 30 to 16 days in Delhi and 29.5 to 17 days in Mumbai
• PAN, TAN, DIN now merged with SPICe making it a single form for company incorporation
• No requirement of inspection for registration under Shops & Establishment in Mumbai
• Distance to Frontier improved from 75.40 to 80.96

Access to Credit

a. Rank improved from 29 to 22
b. DTF improved from 75 to 80
c. Strength of legal rights index improved from 8 to 9
d. Secured creditors will now be repaid first during business liquidation hence given priority over other claims

Access to Electricity

a. Procedures reduced from 5 to 3 in Delhi and 5 to 4 in Mumbai
b. DTF improved from 85.21 to 89.15

Improvement have taken place due to the commitment of the Government to carry out comprehensive and complex reforms, supported by the bureaucracy which has changed its mindset from a regulator to a facilitator. The Government has undertaken an extensive exercise of stakeholder consultations to understand challenges of the industry, government process re-engineering to provide simplified and streamlined processes to create a more conducive business environment in the country.

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