Not fully satisfied with 12 position jump in India’s ranking on ease of doing business index, Finance Minister Arun Jaitley on Sunday said the World Bank has not factored in all the steps taken by the government to improve business environment and ranking should have been “significantly higher”.
In the same breath, he also stated that there was a need to further cut down on the number of permissions required so that the time lag between the decision to invest and the actual investment can be shortened significantly.
“States must realise that local laws which enable availability of land, environmental permissions, sanction of building plans need a re-look,” he said in a Facebook post titled ‘The Ease of Doing Business’.
Jaitley also posed a question if individual structures require separate approval once an industrial zone or new township has been cleared for environmental sanctions.
“The World Bank has upped India’s ranking in the Ease of Doing Business by twelve positions. Last month the World Economic Forum had similarly upgraded India. Even though the push up numerically is modest, it marks the reversal of an adverse trend. Considering the number of steps taken in the last 17 months, India’s position should have moved significantly higher. I understand that all steps have not been factored in since the World Bank criteria has a cut-off date and it also waits for announcements to translate into action before they can be factored,” he said.
The Minister said that to adjudicate quickly upon investment related matters, a commercial division is being constituted in all High Courts. This would improve the enforceability of contracts where India’s ranking is relatively poor.
“The obsolete Specific Relief Act which provides for damages as the normal remedy rather than enforcement, needs to be re-looked,” Jaitley said.
A World Bank report on Tuesday ranked India at 130 out of 189 countries on the ease of doing business, up 12 places from 142nd rank last year.
In the World Economic Forum’s Global Competitiveness Report in September, India’s ranking moved up 16 positions to 55th on a global index of the world’s most competitive economies.
Jaitley attributed the jump in India’s ranking to quicker decision making, faster policy changes, eliminating corruption at the top and smoother clearances.
While the FIPB clearances and the environmental approvals are being routinely granted, investors no longer queue up before the ministries in Delhi lobbying for policy changes or approvals, he said.
Highlighting that the present government has opened most sectors to foreign direct investment, he said, “Time has come to examine whether some of the conditionalities on which FDI investment is permitted, have become anachronic”.
“We need to cut down on the number of permissions required so that the time lag between the decision to invest and the actual investment can be shortened significantly,” he said.
He said many countries have switched to an architect’s certificate as a substitute for building plans being sanctioned.