Two decades of reform, India still a bad place to do business

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Despite two decades of economic reforms, India continues to falter on various sub-indices such as starting a business, issuing construction permits, getting electricity, registering property, paying taxes, trading across border and enforcing contracts or resolving insolvency, said a CII-KPMG report on ‘Ease of doing business in India’.

The report said there is urgency to improve the business environment. It is based on a survey conducted among the Indian industry followed by primary and secondary research to assess the prevailing business regulatory environment in the country.

Key issues highlighted include lack of an effective land acquisition process, unfavourable taxation regime, high cost of starting a business, complicated and time consuming contract enforcement process.

“Having an environment that facilitates entrepreneurship, promotes investments productivity and growth is critical for improving business climate in India. The ease with which this is achieved can be a source of strategic advantage. The vulnerability of our country’s current standing in the doing business index means that reforms in these areas have become critical,” said Richard Rekhy, chief executive officer, KPMG India.

The report indicated that it took 14 months or longer for the land acquisition process and recommended large designated industrial zones with pre-clearances. For starting a business, several approvals were needed now and there was a need to make eBiz portal more effective and there should be access to funds for micro, small and medium enterprises. The report recommended implementation of goods and service tax (GST) and reduce number of taxes and their ambiguous nature, especially in transfer pricing.

Among others, it said there was need to update laws keeping in mind the trends of higher technology updation, greater trade based on IPR and global trade.

The Indian industry hopes that the new government would accord importance to the urgent agenda that would help churn the wheels of investment and growth, said Chandrajit Banerjee, director general, CII.

krishnamohan

@mydigitalfc.com

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