Definition: Internationally, Ease of doing business in an Index published by the World Bank. It is an aggregate figure that includes different parameters that define the ease of doing business in a country.
Recently, the ease of doing business in India is showing good development. In simple terms, Ease of doing Business means when in comparison with different countries how easier is to start an enterprise and also continue its existence in the country with all the legal formalities being complied.
Why Is This Index Essential?
In the Ease of doing business index, ‘higher rankings’ indicate better, usually simpler, regulations for businesses and stronger protections of property rights. Therefore, It attracts Foreign Investment, and Countries are encouraged to bring reform to existing laws to bring about laws that are more business-friendly. Investments come with not only increased Job opportunities but also improved and advanced technology.
Ease for doing business shall enable Innovation in indigenous technologies, and out of the way solutions to problems. Also, such entrepreneurial interventions are necessary to bridge institutional gaps. So not only they will reduce the burden of the government, but also compliment its services.
Recent Developments in India’s Ease of doing Business
India in 2014 was among the 50 least favourable countries to do business. In 2015 the government set a target of breaking into the top 50 by 2020. Since then, the rise has been consistent.
|India’s ease of doing business ranking over the last six years|
As part of Government of India’s Ease of Doing Business (EODB) initiatives, the Ministry of Corporate Affairs has introduced a new form ‘SPICe +’
(pronounced ‘SPICe Plus’) replacing the existing SPICe form, which would be applicable for all new company incorporations w.e.f 15th February 2020. The said form would imbibe a number of other filings which would otherwise be required to complied with. This is beneficial for easy registration of property, fast disposal of commercial disputes and simpler tax regime for making India one of the easiest places to do business.
The Ministry of Corporate Affairs brought about a transformational change in the company name reservation and incorporation processes by undertaking Government Process Re-engineering (GPR) and setting up the Central Registration Centre (CRC) for processing of Company “Name Availability” and “Incorporation” (INC-32 – SPICe). This has enabled establishment of company in a single day.
The focus of the ‘ease of doing business policy’ is mainly on cutting out the tedious documentation and unnecessary paperwork and getting the work done in a shorter time span. This was a much needed step to simplify compliance and to make India more investor friendly.
The regulatory landscape is changing. This presents opportunities to fully utilise the new measures that simplify starting business in India.
Also read MSMEs in India
This article is written by Mahima Rathod and edited by Rupreet Kaur Dhariwal.