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Improvements in "Ease of Business"

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Improvements in "Ease of Business" due to Budget 2021 -Target of Under 50 Indian-American Congressman Ro Khanna pushes for USD 10-trillion re-industrialisationplan- Mint Reliance Jio raises $253M from Intel's venture capital arm in 12th foreign investment –Indian Finance News Indian envoy, Alabama guv discuss expanding economic partnership – OutlookHeadlines like these have become run-of-mill for India. Investments from all over the globeare pouring in for Indian Businesses and start-ups. The whole world wants to be involved intrade with India. The aforementioned statements are not just claims but an incontrovertibletruth. India reached its highest ever foreign direct investment (FDI) inflows at $67.54 billionduring the first nine months of the financial year 2020-21But the question is who is at the backstage of the generous FDI inflows. Reforms in Ease ofDoing Business have been wooing foreign investment in India. As per the Doing BusinessReport, 2020, India has improved its ranking by 14 places to be ranked 63 out of 190countries. A high ease of doing business ranking reveals that India’s regulatory environmentis very conducive to the establishment and operation of a local firm. This report also capturesthe experience of small and mid-sized businesses across the nation with the state and thecentral government, by measuring the time, costs, and red tape they deal with. The foreign investors believe in the Indian start-up thus FDI in Indian start-ups is increasingexponentially. Global investors readily provide the capital boost that the start-up companiesrequire for business expansion. Thus, even the government of India does not leave any stonesunturned in making the business environment of India investor-friendly. The Union budget2021 was a precedent for future budgets not only because it was entirely a digital budget, butalso because of its robust policies which will provide a fillip to the fledgling businesseswhich are consequences of the ‘Black Swan’ pandemic. These policies also incentiviseforeign investments and provide a stimulus to the Make-in-India.020406080100120140160134142130 13010077India's Ease of Doing Business Rankings2014 2015 2016 2017 2018 2019 2020 2021Escalating the Doing Business ladder amongst 190 countries is the only path for the fruitionof the Indian dream of a 5 trillion economy and that of Atmanirbhar Bharat. From here onour target should be to enter the coveted top 50. To facilitate this leap, Union Budget 2021has addressed the pressing need at the grass-root level which is represented by micro, small,and medium enterprises (MSMEs)., which is considered as the backbone of the fifth largesteconomy of the world, India. The government has proposed several structural andadministrative changes to benefit MSMEs. These changes had accelerated the ease of doingbusiness in India which is at the focal point of these reforms. To bring more liquidity into thesystem, Initiatives have been taken to set up an end-to-end investment clearance cell that willprovide pre-investment advisory, information on land banks, and facilitate clearances at statelevels. To boost domestic MSMEs, the government proposes to set aside Rs 15,700 crore forMSMEs in FY 2022, which is double the capital expenditure prosed in the budget of 2020-2021.If the budget 2021 is a boon for the mainland businesses it is a blessing for the NRIs living inthe distant land looking forward to investing or start-up of One Person Companies (OPC) inIndia. As the name goes, an OPC is a corporate entity with a person and offers a universe ofadvantages, like easier compliances and minimum requirements even as it enjoys the legalstatus of a company and gets the same access to capital. India ranks 163 in enforcingcontracts and 154 in registering a property for business. Current reforms are a step forward toovercome these limitations. The budget has also provided relaxation in the previous rule ofonly a resident of India who stayed in the country for over 182 days in the previous calendaryear could set up an OPC...But as per the revised regulations the residency limit for an Indiancitizen to set up an OPC from 182 days to 120 days and allow NRIs to incorporate OPCs inIndia. If this was not enough motivation for our fellow NRIs, the budget has also proposed towaive off the limitation of the paid-up capital of amount 50 lakh and an annual turnover of 2crores for NRIs which was applicable at present to the OPCs, and allow their conversion toany type of company any time. This move will not only boost the ease of doing business butcould also be a shot in the arm for start-ups. Many projects, especially those in the IT sector,need to be run as a company and not individually. Entrepreneurs will find the OPC route lessinconvenient.To integrate India in the global supply chain and boost domestic manufacturing thegovernment has introduced yet another trump card on the table by promising to spend 1.97lakh crore on Production linked incentive scheme(PIL) over the next five years starting fromthis fiscal year. The PLI scheme has shown its efficacy in the past in three major sectors –mobile manufacturing and electric components, pharmaceutical, and medical devicemanufacturing. This is a path forward in making India a hub for manufacturing and exportsand improving India’s ranking of 68 in trading across borders. According to this scheme,eligible players will obtain incentives ranging from 4 percent to 6 percent of production valuefor five years, after they achieve their investment and production value target for each year.The move will encourage the participation of global players in the manufacturing sector andmake India competitive at the global level by attracting investments. The scheme also attractslocal companies to set up or expand existing manufacturing units in the country.But even after all these improvements and reforms. Is this sufficient? Dr. Jaijit Bhattacharya,President of, Centre for Digital Economy Policy Research feels that this year’s budget is anexcellent one but not a

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