The Ease of Doing Business (EODB) index is a crucial metric that reflects a nation’s business environment’s competitiveness and efficiency. It evaluates factors that impact starting and operating businesses, such as regulations, infrastructure, taxation, and more. India, as one of the world’s fastest-growing economies, has made substantial strides in improving its EODB ranking.
Current Status:
India’s journey towards improving the ease of doing business has gained momentum in recent years. According to the World Bank’s Doing Business Report 2021, India jumped 14 places to secure the 63rd position among 190 countries. Key reforms like simplifying business registration, introducing a unified Goods and Services Tax (GST), and enhancing digital infrastructure contributed to this improvement.
Global Comparison:
While India’s progress is commendable, it’s important to benchmark against other countries. Nations like New Zealand, Singapore, and Hong Kong consistently rank among the top performers due to their streamlined procedures, investor-friendly policies, and efficient regulatory frameworks. India’s objective should be not only to catch up but also to surpass these leaders.
Areas Needing Address and Reform:
Despite its advancements, India still faces challenges that hamper its EODB ranking. Complex land acquisition procedures, cumbersome construction permits, slow contract enforcement, and a high compliance burden are areas that need urgent attention. Additionally, challenges related to corruption, bureaucratic red tape, and legal complexities continue to deter business growth.
Significance of Ease Of Doing Business
An improved Ease Of Doing Business ranking attracts foreign direct investment (FDI), boosts entrepreneurship, and stimulates economic growth. A favourable business environment encourages domestic and international investors to establish and expand operations in the country, leading to increased job opportunities and technological advancement.
Goals and targets:
India has set ambitious goals for improving its Ease Of Doing Business (EODB) ranking. The government aims to break into the top 50 in the global rankings. This involves targeted reforms and a holistic approach that addresses challenges across sectors.
One Window, One Solution:
The “One Window, One Solution” concept emphasizes the need to simplify bureaucratic processes by providing a single point of contact for businesses to interact with the government. Streamlining licenses, permits, approvals, and clearances through digital platforms can significantly reduce administrative burdens and enhance transparency.
How to Improve Ranking:
1. Simplify the Regulatory Framework: Review and amend regulations to eliminate redundant procedures and reduce bureaucratic hurdles.
2. Enhance Digital Infrastructure: Invest in robust online platforms for business registration, filing taxes, and obtaining permits, minimizing physical interactions.
3. Fast-track Dispute Resolution: Strengthen contract enforcement mechanisms and establish specialized commercial courts for quicker resolution of disputes.
4. Land and Property Reforms: Simplify land acquisition processes and establish transparent property registration systems.
5. Tax Reforms: Continuously refine the GST system, making it more user-friendly and efficient.
6. Skill Development: Invest in workforce skill development to meet industry demands and improve labour productivity.
7. Strengthen Investor Protection: Enforce corporate governance standards and bolster the protection of minority investors’ rights.
India’s commitment to enhancing its ease of doing business is evident through its consistent efforts and notable achievements. By addressing existing challenges, implementing reforms, and focusing on enhancing transparency and efficiency, India can achieve its EODB goals and create an environment that fosters innovation, investment, and sustained economic growth.
