Standing Committee Report Summary
Ease of Doing Business
The Standing Committee on Commerce submitted its
report on Ease of Doing Business, on December 21,
2015. The Report makes recommendations to
improve India’s Ease of Doing Business rankings,
across various parameters.
Starting a business: The Committee observed that
there is a need to review all forms and rules related to
incorporation of a company, issuance of Permanent
Account Number, Value Added Tax registration, etc.
This would ensure that administrative changes are
implemented in an integrated manner. It
recommended that a unique business ID containing
all information about the company should be used as
the sole reference for regulatory processes. Further, it
suggested having a single application form and
payment gateway for all registrations.
In order to eliminate the need for verification,
certification and digital signature, the Committee
suggested linking Aadhaar, PAN and Passport.
Further, it noted that streamlining of regulation will
assist start-ups in getting seed capital.
Construction permits: The Committee
recommended introducing an online single window to
approve construction based on the risk, structural
requirements and intended use of the building. It also
suggested that state governments demarcate areas
where land use can conveniently be changed for
industrialisation, without affecting fertile land.
Electricity: The Committee observed that it takes a
long time to get an electricity connection in
metropolitan cities like Mumbai and Delhi. It
recommended amending relevant laws to reduce
regulatory hurdles in obtaining a connection. Further,
it was of the opinion that these changes be replicated
at the state level. The Committee also suggested
setting up hubs for supply of electricity to
entrepreneurs, till their connections are regularized.
Registering property: The Committee remarked that
the pace of digitising land records has been slow. It
suggested that these records, maps, etc. be digitised at
the earliest. It also recommended that the
government upload standardized formats of
documents like sale deed, lease deed, power of
attorney, etc on their websites. Further, it suggested
that conclusive land titling may be done by
integrating space technology (such as satellites used
for communication, positioning, etc.) and ID proofs
like Aadhaar, which may facilitate smooth transfer of
property. This would reduce the amount of capital
that is locked up due to disputes over land titles.
Paying taxes: The Committee recommended
implementing a stable, fair and predictable tax regime
in the country. It remarked that physical interface of
taxpayers with authorities is seen as harassment. In
order to reduce this, electronic scrutiny of taxes cases
could be undertaken, without involving any physical
interface. It also suggested that the corporate tax rate
should be brought down to 25%. The current rate of
corporate tax is 30%.
In order to create a start-up friendly environment, the
Committee suggested simplification of the existing
tax structure. It also suggested having a separate tax
regime for start-ups, to enable them to compete with
foreign competitors. It also recommended reduction
in volume of cash transactions by using technology
for verification of financial transactions.
Cross-border trading: In order to reduce delays
caused by involvement of multiple agencies in
obtaining relevant documents for cross border trade,
the Committee recommended setting up an online
portal -National Trade Portal. This will help in
having a single online application for getting
necessary certificates. It also recommended reduction
of time for clearance of goods from a few days to half
a day. Further, it suggested liberalisation of policies
for cross border trading.
Resolving insolvency: The Committee recommended
that the National Company Law Tribunal be made
functional. Additionally, it suggested the Bankruptcy
Code and commercial benches in high courts be
introduced to strengthen insolvency resolution.
Banking sector reforms: The Committee expressed
its concern about the rising number of stressed loans,
which have affected the performance of banks. It
recommended that RBI give new licenses to asset
reconstruction companies, in order to bring more
capital to businesses, and clean up stressed assets.
Enforcing contracts through judicial processes:
The Committee suggested that litigation processes be
simplified and shortened. It recommended creation
of certified practitioners, to assist dispute resolution.
Further, it suggested that adjournments be limited to
unforeseen and exceptional circumstances only. The
Committee also recommended the implementation of
e-courts which will reduce time and costs involved in
resolving a case.
Other recommendations: The Committee suggested
that environment clearances be designed in a way that
the Ministry responds in a time bound manner. It
also recommended that labour law reforms be
undertaken, to bring in clarity and simplify them.
