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Ease of Doing Business 2019: GST, IBC big winners; list of reforms that put India among top 10 improvers

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India has jumped 23 places to secure 77th rank on the World Bank Ease of Doing Business index on the back many business-friendly reforms, with the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code (IBC) emerging as big winners.

The World Bank noted that India improved on six of ten parameters as against eight last year, putting it among top ten improvers for the second time in a row.

India has jumped 23 places to secure 77th rank on the World Bank Ease of Doing Business index on the back many business-friendly reforms, with the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code (IBC) emerging as big winners.

While India has not shown improvement in protecting minorities, the country continues to remain among the top 10 countries.

The World Bank noted that India improved on six of ten parameters as against eight last year, putting it among top ten improvers for the second time in a row. While last year too, India was praised for good accessibility to electricity, this year, the country made a noticeable improvement on ‘Getting Electricity’ parameter.

The annual report — which plays a significant role in giving investment perspective to global investors — noted that the GST helped tax-paying easier, while the IBC improved the lending capacity of banks.

Labour market regulation made by Maharashtra got a special mention for changing regulations pertaining to weekly holiday work, overtime hours and paid annual leave, while the slipped on ‘Enforcing Contracts’ and ‘Resolving Insolvency’ parameters as compared with last year.

The World Bank’s Doing Business report assesses 190 economies on ten parameters — starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
Improvement in parameters by India

Starting a business:

India made starting a business easier by fully integrating multiple application forms into a general incorporation form. India also replaced the value-added tax with the GST (Goods and Services Tax) for which the registration process is faster. These reforms apply to both Delhi and Mumbai. At the same time, Mumbai abolished the practice of site inspections for registering companies under the Shops and Establishments Act.

Dealing with construction permits

India streamlined the process of obtaining a building permit and made it faster and less expensive to obtain a construction permit. It also improved building quality control by introducing decennial liability and insurance.

Getting electricity

The Delhi Electricity Regulatory Commission reduced charges for low voltage connections. Getting
electricity was also made easier in Delhi through a reduction in the time for the utility to carry out the external connection works.

Getting credit

India strengthened access to credit by amending its insolvency law. Secured creditors are now given
absolute priority over other claims within insolvency proceedings.

Paying taxes

India made paying taxes easier by replacing many indirect taxes with a single indirect tax, the GST, for the entire country. India also made paying taxes less costly by reducing the corporate income tax rate and the employees’ provident funds scheme rate paid by the employer.

Trading across borders

India reduced the time and cost to export and import through various initiatives, including the implementation of electronic sealing of containers, the upgrading of port infrastructure and allowing electronic submission of supporting documents with digital signatures.

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Source: Financial Express