Ease of Doing Business in India

In the development strategy adopted after Independence in 1947, India paid insufficient attention to improve business environmentso crucial for rapid economic development to combat the twin problems of poverty and unemployment. As a consequence, entrepreneurs struggled to do business in the face of restrictive policies and regulations that choked rather than enabled business enterprises. Myriad rules and regulations inhibited business growth and held back India from achieving its potential. Economic reforms initiated in 1991 marked a clear change in direction as successive governments started paying attention to difficulties faced by businesses. Although the situation has improved considerably in recent years yet India remains a tough place to do business as per benchmarks of developed countries. In the World Banks Doing Business Report, 2015, India was placed at 142 among 189 countries in terms of ease of doing business. India ranked even below Pakistan which occupied 128th rank and much below China which secured 90th rank. Encouragingly, India jumped to 100th rank in the 2018 Report. The improved ranking has enhanced Indias global image as a promising investment destination. Governments target of breaking into the list of top 50 countries is ambitious, yet achievable if it gets its priorities right on the weak areas. India is presently the worlds fastest growing major economy. In the last few years, it has emerged as a global economic power, a leading outsourcing destination and a favourite of international investors. Indian industry has upgraded technology and product quality to a significant degree and met the challenges of openness after being protected for so long. This book records and reviews the business environment in India prior to the initiation of economic reforms in 1991 (i.e. for the period 1947 to 1990). It provides a detailed account of policies and measures adopted for industrial liberalization, financial deregulation and trade openness since 1991. More importantly, it explains various programmes and schemes announced and implemented by the Government in recent years to catapult the Indian economy to a higher growth trajectory. The book contains 29 chapters which have been categorized into five theme parts. Part I of the book, consisting of 2 chapters, describes the current state of ease of doing business in India. India is compared with leading countries of the world in terms of Doing Business Report, 2018 of the World Bank. Similarly, States in India are compared based on recent reports on Assessment of State Implementation of Business Reforms released by the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, Government of India. Part II, containing 5 chapters, traces, in historical perspective, the business environment in India prior to the initiation of economic reforms in 1991. It explains excessive regulation and control of private enterprise, state domination of financial sector, multiple and punitive tax regime, protectionist foreign trade policy and restrictions on foreign capital. Part III, comprising 7 chapters, provides a detailed account of policies and strategies to unshackle the economy from the cobwebs of unnecessary bureaucratic controls. It particularly focuses on: (a) legislative measures to promote and facilitate private enterprise, (b) tax reforms, including the introduction of Goods and Services Tax (GST) from July 1, 2017 and (c) stimulus to foreign direct investment (FDI). Part IV, consisting of 12 chapters, explains various programmes and schemes announced and implemented by the Government in recent years. These include, inter alia, Make-in-India Campaign, Start-up India Initiative, Micro Units Development and Refinance Agency (MUDRA), Stand-up India Scheme, eBiz Project, Smart Cities Mission, National Skill Development Mission (NSDM), Pradhan Mantri Kaushal Vikas Yojana (PMKVY), Atal Innovation Mission (AIM) and Digital India. Part V, containing 3 chapters, spells out current challenges facing the Indian economy and assesses its future prospects.