The past few years have seen India improve its ranking on the World Bank’s Ease of Doing Business Index. Despite the pandemic, India last year also managed to attract record foreign direct investment. However, there’s scope for improvement, especially if India wants to break into the top 50 countries on the index, where it was last ranked at 63.
With a view to improving investor experience in setting up and doing business in India, the industry body, Bombay Chamber of Commerce and Industry recently conducted a survey, in association with consultancy major EY. Since the pandemic has been especially tough for the informal sector, the survey focussed on the micro, small, and medium enterprises (MSME) segment, and the issues they face. The report, called ‘Insights on Ease of Doing Business in India with a Special Emphasis on Maharashtra’, featured 104 respondents from MSMEs to large enterprises, across sectors and states such as Maharashtra, Karnataka, Odisha, and Delhi.
“The core objective of the exercise is to improve the investor experience throughout the business cycle in India and Maharashtra that can ultimately lead to increased investments, thus contributing to the overall economic and social growth of the economy,” the survey said.
The survey noted that the government has undertaken various reform initiatives to help with the ease of doing business, and it studied the industry's feedback. In terms of paying taxes, around 32% of the respondents felt that relevant information wasn't available online; there was also lack of awareness about Maharashtra's single-window services, with approximately 60% of the respondents not being aware about them. Under land and building services, only 14% of the respondents used the online system for land allotment, while under property registration and mutation services, 55% of respondents felt there was limited information available, 53% felt that visits to the land records department didn't yield the desired results, while 77% didn't know there was a facility to file complaints. For utility services, around 50% of the respondents were dissatisfied with the process of obtaining water and electricity connections. On the inspection system, over 50% of the respondents were unaware about the Central Inspection System, while over 70% were not aware about joint inspections.
The study also came up with a set of recommendations, suggesting reforms in identified areas of improvement both at the central and the state levels. These recommendations focus on problem-solving, suggesting implementable solutions based on the survey analysis and the Chamber’s interactions and direct feedback from MSMEs and industries.
Broadly, the survey came up with three recommendations:
1) While Acts and Rules often need to be modified, there should be an online repository where the original Acts and Rules are available, along with state-level amendments, in a chronological manner. The online repository should also support keyword-based searches.
2) Third parties, which assist an industry to obtain approvals from government departments, should be formalised and regulated through legislation to ensure uniformity in service and fees.
3) A central-level document repository should be set up with all approvals and documentation available online. This would reduce the burden on industry to present physical documentation, and any gaps could be communicated over email.
Specifically for Maharashtra, some of the main recommendations were:
1) Digitisation of government to business services with no physical touch point with the departments. There should also be provision for professionals such as chartered accountants, lawyers, architects, and consultants to register and avail the services in a single-window system.
2) To fast-track service delivery, there should be local-level facilitation support for investors, along with a clearly defined escalation mechanism for grievances.
3) There should be improved information availability, such as text and service maps based information about service workflows, fee structure, appeal mechanism, helpline numbers, and timelines for service delivery; information about policies and schemes, and an indicative incentive structure based on inputs provided by the user pertaining to industry operations.
The Chamber, which was founded in 1836 and is one of the oldest industry bodies in the country, has shared the findings from the research with central and state government officials. “This document is a contributory step towards enhancing India’s economic competitiveness... The Chamber expects this research study and its recommendations will initiate discussions on policy making and prompt related action between both policy makers and member enterprises,” it said in a release.