The exorbitant logistics cost has always been the bane while doing business. Confederation of Indian Industry (CII), the industry body has highlighted this as a deterrent in India’s mission to be a self-reliant nation.
Mr. Chandrjit Banerjee, Director General, CII said, “While many policies have been announced for a facilitative investment climate, effective translation into ground-level outcomes will help investor perceptions and further boost confidence. We believe that taking the ease of doing business route can unlock huge potential when the world is seeking new investment opportunities”.
The premier industry body also stated, “India’s high logistics costs impact its competitiveness. This will require medium-term action such as increasing the share of railways and waterways in transport, improving first mile and last-mile connectivity and reducing port dwell time. Cross subsidization of freight should be rationalized.”
More outcome-oriented action on Ease of Doing Business (EODB) is the route to India’s mission of self-reliance and should be the way forward. Sustaining this reform momentum can drive in new investments, including overseas investment.
If strong measures are taken up in the following seven areas, it can pave the way for the reduction of cost and time, making the Indian industry competitive.
1. Single Window System
Effective implementation of an online Single Window system is needed for strengthening EODB.
2. Regular Monitoring
Single interface, regular monitoring by the Chief Secretary of a state, and time-bound approvals are to be implemented in all states.
3. Compliance
Compliances for labor regulations need to be speeded up at lower costs for which a quick and low-cost trade facilitation mechanism should be in force. For example, the states can follow the example of Uttar Pradesh by exempting the industry from specific labor laws for three years.
4. Digital Reforms
Digital reforms like virtual court proceedings, e-filing, and work from home could help speed up the court deliberations and the challenges faced while enforcing contracts due to insufficient commercial courts and infrastructure.
5. Inspections
Computerized risk-based inspections, synchronized joint inspections, and differentiated inspection requirements for low-risk industries reduce the inspection burden on companies.
6. Exemptions
The CII has also suggested that the MSME sector be exempted from approvals and inspections for three years under state laws while following all rules.
7. Self-Certification
For those MSMEs with a good track record, a self-certification route can help for renewals and approvals.
The latest World Bank report reveals that India’s ranking has significantly improved from 142nd to 63rd. This leap of 79 positions is due to the series of reforms across various areas introduced by the Central and State