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India has long way to go to ease doing of business: Parl panel

business Updated: Dec 29, 2015 01:15 IST
Saubhadra Chatterji
Ease of doing business

Employees work inside a steel factory in Agartala. Despite the NDA government’s frantic efforts to improve the ease of doing business in India, things are yet to change on the ground, a parliamentary panel has reported.(REUTERS File Photo)

Despite the NDA government’s frantic efforts to improve the ease of doing business in India, things are yet to change on the ground, a parliamentary panel has reported.

The panel has also observed that there is an “urgent need” to further bridge the gap between the policies on paper, and their implementation on the ground.

In its report tabled in Parliament during the Winter Session, the standing committee on commerce suggested creating a unique “business ID” number that would contain all necessary information for a particular company. This number could act as the sole reference in registration, and other regulatory processes in order to reduce the hassles in setting up business in the country.

It has also suggested that Aadhaar, PAN and passport may be linked to eliminate the basic need of verification.

The report of the multi-party panel comes a month after the World Bank upgraded India’s ranking to 130 from 142 in ease of doing business.

The parliamentary panel, headed by BJP’s Rajya Sabha MP Chandan Mitra, has also given concrete examples on how India is lagging in many aspects of creating a better business environment. It has suggested that there is an urgent requirement to reduce procedures and the time taken for the registration of a company.

While Indian states put a huge burden of compliance on upcoming companies, it requires just half a day to start a business in New Zealand, the panel noted.

There are 33 procedures spanning over 191 days before a warehouse can be constructed in India. In Singapore, it takes just 26 days and 10 procedures.

With an eye on more private investments for its Make in India initiative, the NDA government has been relaxing norms and cutting red tape for faster clearances of business proposals. Finance minister Arun Jaitley, in an interview to PTI on Sunday, had highlighted that the ease of doing business would be a priority area for the government in 2016.

The panel’s report recognised the Centre’s focus and efforts to create jobs and generate higher growth, but it also noted that the businesses in India have to interact with multiple authorities with “little coordination amongst them”.

While suggesting several steps to the Centre, the Mitra panel has also said that states must demarcate areas for industrialisation as this would speed up acquisition of land.

It also suggested that the issue of environmental clearances needs to be aligned in a manner that the ministry is in a position to say ‘yes’ or ‘no’ within a specific timeline and let the investor take a decision as to whether to invest or not.

The panel also recommended preparation and implementation of a national single online application for getting all necessary certificates and no-objection certificates.