Industry And Cluster | News & Insights

EODB key to India’s self-reliance mission

Published: June 23, 2020

With more outcome-oriented action on ease of doing business (EODB), huge momentum to India’s domestic and overseas investment can be imparted at a time when self-reliance is being strengthened, according to the Confederation of Indian Industry (CII), which recently outlined eight areas where strong measures in mission mode can help to boost the economy.

“While many policies have been announced for a facilitative investment climate, effective translation into ground-level outcomes will help investor perceptions and further boost confidence. We believe that taking the ease of doing business route can unlock huge potential at a time when the world is seeking new investment opportunities,” said CII director general Chandrajit Banerjee said in a press release. Sustaining this reform momentum can drive new investments, including those from overseas, stated CII. CII identified immediate and medium-term measures in eight areas for EODB that can reduce costs and time for making Indian industry competitive.

CII prioritised effective implementation of online single window system (SWS) as the first step towards strengthening EODB. Regular monitoring by the chief secretary of a state, time-bound approvals and single interface should be implemented in all states. Currently, only 21 states have implemented this system. For a business entity, there should not be any other point of interface with the government other than the SWS. Simplifying property registration and acquisition of land is critical. Industry should be permitted to buy land directly from farmers with deemed approval after 30 days. Digitisation and integration of land records and single online portal with integrated information can help in titling.

Compliances for labour regulations could be speeded up at lower costs. States can follow the example of Uttar Pradesh by exempting industry from select labour laws for three years. The applicable limits under Industrial Disputes Act 1947, Factories Act 1948 and Contract Labour (Regulation and Abolition) Act 1970 must be raised immediately by all states, stressed CII. At a time when India is seeking deeper overseas engagement, it is critical to ensure a quick and low-cost trade facilitation mechanism. The SWIFT system needs to bring on board all partner group agencies.

The risk management system, port community system and authorised economic operators need to be strengthened, including through automation and digitisation, it said. Enforcing contracts is a challenge due to insufficient commercial courts and infrastructure. CII suggested major digital reforms like virtual court proceedings, e-filing and work from home to speed up court deliberations.

The alternative dispute resolution institutions can be expanded in all parts of the country with arbitration and mediation centres. Over the medium term, judicial capacity must be enhanced with specialised commercial courts at high courts and district courts. Synchronised joint inspections, computerised risk-based inspections and differentiated inspection requirements for low-risk industries can reduce the inspection burden on companies, noted CII. Self-certification and third-party certification can be extended, as in Telangana, where companies with good track record in the medium-risk category are permitted self-certification. In the medium term, an online central inspection system for labour, fire, lift, electricity, boilers, etc is required.

Micro, small and medium enterprises (MSMEs) need a special helping hand, according to CII, and should be exempted from approvals and inspections for three years under state laws while following all rules. Self-certification route can be used for renewal and approvals for MSMEs with good track record. Lastly, India’s high logistics costs impact its competitiveness and this will require medium-term action like raising the share of railways and waterways in transport, improving first-mile and last-mile connectivity and reducing port dwell time. Cross subsidisation of freight should be rationalised, added CII.

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