India is not among the easiest of places to do business. The lack of an effective land acquisition process, unfavourable taxation regime, high cost of starting a business, complicated and time-consuming contract enforcement process and archaic laws, rules and regulations make the country indeed a hard place to set up and run a business.
World Bank, in its latest report, has ranked India 134th amongst 189 nations in ease of doing business.
Across the industry, there is an element of uncertainty to start a new business venture. “At a time when global economy is reeling under tremendous pressure, it becomes an absolute imperative to streamline the framework of doing business in the country and establish a favourable, liberalised and transparent business environment,” says Chandrajit Banerjee, director general, Confederation of Indian Industry.
When there is improvement in business confidence, it should pave the way for restoring investment cycle, revival of industrial growth and put the economy back on higher growth trajectory. “Damodaran Committee has done considerable ground work on improving ‘ease of doing business’ and its recommendations should be examined and acted upon in right earnest… ,” said Sidharth Birla, president, Federation of Indian Chambers of Commerce and Industry (FICCI).
Reforms should be targeted to focus upon removing key impediments in setting up businesses, getting fast track clearances, effective contract enforcements, simplifying labour regulations and removing infrastructural bottlenecks.
Richard Rekhy, CEO, KPMG in India said, “The vulnerability of our country’s current standing in the Doing Business index means that reforms in these areas have become critical.”
RV Kanoria, chairman, FICCI Taskforce on Land Reforms & Policy said, “Land is a critical resource for setting up industries. The new Act has made it extremely difficult to acquire land for development projects.”