Good evening thanks for joining us on the CNBC tv18 special India has jumped 23 places in the world banks Ease of Doing Business Rankings from 100 last year India now clocks in at 77 as we await to hear from the finance minister the Commerce Minister and other top officials here’s the deai pp secretary ramesha we shake the man.
Who along with his team has worked hard to ensure that India climbs up the World Bank’s Ease.
Of Doing Business Rankings take a look how have you managed to achieve another 23 place jump this year Saleem in last two years we actually established a hotline with our users and clients I think that is the best thing that happened the kind of connect that we have the stakeholders now and near reforms were being.
Done but we were not checking on a regular basis.
Whether the deforms are being felt on the ground and unless those are felt on the ground the World Bank doesn’t take obvious off right so I think that is the hotline that we have set up.
Is working very well so you know if that’s interesting because as you point out the.
World Bank goes by feedback of course the two cities that it focuses on are Mumbai and Delhi but this is feedback from stakeholders on the basis of which the World Bank prepares its report which is different from the states Ease of Doing Business Rankings with the Vipp actually.
Puts out because their what the government says it feels has changed on the ground and the indications from stakeholders has seen a has seen a variance in your in.
Your last assessment but let me start by asking you sir but the areas where we’ve made most progress construction permits in 2017 at 181 in 2018 we’re.
At number 52 that’s a change of 129 spots what’s changed actually three years we have done an enormous amount of work the misspell Corporation of Delhi South MCD and the Municipal Corporation of Mumbai they have worked hard supervised by the Ministry of Urban Development now Minister of Housing and Urban Affairs see first of all they are layer everybody had to go to several agencies right outside the corporation and within the corporation to apply for no seas.
When they wanted to get a building permit now all there was integrated into one common application form okay and then online system was set up that you have to apply only online not offline then we had the functionality of a deemed NOC if that there.
Was no objection within 15 days it was a demon then deemed approval if there was no decision in 30 days then for inspections also.
Now we have a joint inspection mechanism and there have been several other changes which has made sure that this people don’t have to worry about construction permit at all okay completely online they don’t have to run around at the agencies like National Monument Authority Airport Authority of India DMRC.
They also made color coded maps.
Okay so that they can also quickly give a feedback about whether a particular building can be constructed or not okay so all that has made in our process reengineering use of technology removal of personal interface I think has made this change.
It took time to be reflected in on the ground okay because if this is a very complex operation right so you know you said that you’ve been working on improving the ranking on construction permits for three years and it’s it’s showing results in this year’s survey how.
Much of this is being replicated across other states as well is the Delhi and Mumbai example being exported to other states as well when it comes to construction permits and again for the benefit of our viewers let.
Me just highlight what changes have been made on.
The ground so in terms of construction permits procedures have been reduced from thirty seven.
To twenty in Mumbai and from twenty four to sixteen in Delhi time reduced for getting permits one hundred and twenty eight days earlier to.
99 days in Mumbai now and 157 odd days in Delhi earlier to 91 days today so significant improvement yes as a matter of fact this is all based on the feedback whenever we made a system when we’ve.
Ever made a change and people say that they are not able to feel it we found the reason and the laws have been amended you look at the unified building laws.
That actually allows for up to 1.
5 lakh square meters of environment approval is inbuilt into the building by this unified building bylaws okay which were implemented in Delhi so.
There has been empowerment of the Municipal Corporation’s the delegation of powers by the Minister of Environment and Forests so this legislative changes regulatory changes bringing in technology and process reengineering all that have had a great effect and this is going to help the construction industry and you are looking talking about other cities and states actually these reforms are being done in all over.
The country so now we have most of the states who are having the same similar system okay so this is not unique to Delhi and Mumbai right I may just also clarify that if you.
Look at the ten indicators on which World Bank does its ranking.
Yes many of those indicators are pan India let’s say trading across borders yes access to credit or let’s say even paying taxes most.
Of these are central government now the some of that cut is shared with the states and protecting minority investor insolvency a bank record so they.
Are all pan india reforms so let me talk to you about the other indicator where we’ve seen.
A significant up moving that is trading across broader the ranking in 2017 was 146 in 2018 we’re now at number 80 the difference of about 66 positions what have been the big changes that have happened there in order for us to make this improvement and also come closer to international best practices actually Shaleen I think that of.
All the reform that we have done the one of the biggest in fact.
Reforms is on trading across borders that affects every exporter and importer in the country and every business that depends on imports as well so.
I think this is a dramatic change that has happened.
All the customs set up a very robust risk management system okay earlier they were checking hundred percent of the consignment they have now stopped it.
Now they’re checking only about list about five to.
Ten percent okay and in some cases maybe twenty or thirty percent so overall consignment if you can combine all types of cargo is less than twenty percent secondly they made an online system so that you don’t have to again apply to.
Various partner agencies like fssi and all that then they had the e sonship okay so that all there is a repository of electronic documents right we don’t have to run around then of course getting a facility of getting advanced below Factory now you can.
Actually have importer can apply for this bill of entry can be filed much before the vessel actually arrives okay so you complete your formality even for the vessel has come that it for delivery a direct port entry in jlpt and other places see now earlier there was virtually no diet for delivery for importers right now it is almost 40% in JLP okay and he was going up in other places direct port entry.
For exporters there earlier.
Every container had to be stuffed in the factory in the presence of a customs inspector now in the factory there is a possibility.
Now they can just seal it themselves.
And if the full container gets tight every goes for export so you see.
The mind-boggling changes have taken place in customs it is reflected this year we are very glad we are actually this was one of our complaints that actually changes in the ground were.
Not offended yeah we are very glad that finally we have got the result that we had been seeking well I remember very clearly you told me that we had done a lot of work on this front but you were not but the ranking last year specifically on this parameter was below your expectation but let me talk to you about two.
Other important indicators and resolving insolvency 137 was the ranking last year 108 is where we are were up 29 points but do you believe that the full benefits of the rollout of the IBC haven’t fully been factored in and how much of an improvement would you expect see the benefit of enactment of the IBC we got last year because our quality of that regulation index went up but now the challenge is to get more and more companies to go for reorganization and not liquidation we are.
Hoping that more and more companies will actively or for the route of reorganization and then actually our ranking will improve further in the IBC insolvency resolution okay but right now unfortunately more companies.
Are going for liquidation so that is a trend we hope will be reversed because of that the entire IBC regime is getting.
More robust these people are finding more and more results so that will actually have the impact one benefit we had of IBC this year on access to credit we moved up a.
Little bit because now your secured creators are actually they have the full topmost priority so that actually helped us improve our rank and access to credit okay so outside of the fact that liquidation is.
A concern and could perhaps weigh on the ranking even next year if that trend were to continue what is the other fee back.
Specific to the IBC process that the rankings are thrown up see the main thing well Banksy’s after the enactment of.
Recovery and the recovery percentage will go up only when there is more organization and resolution and not liquidation you never get much recovery in liquidation so that is what I.
Think that that should be the objective.
That should be their aim that more and more companies hopefully we’ll go for reorganization is that a worry because under the law 272 is a timeline for resolution but most cases so far the ones that have been resolved even out of the original 12 have taken in excess of that see we have to understand that this was done.
Only two years ago and for such a massive law and implementation machinery I think the.
Been remarkable I mean all the problems will not get sorted out in a very short time but I think things are improving very.
Rapidly and the next one year we definitely hope that we will.
Make further progress let me ask you about the impact of the GST sir because if I look at the paying taxes parameter 156 2017 that was the ranking 121 this.
Year up 35 places what’s been the impact of the GST and how does this reflect as far as the ranking is concerned actually in this year the GST impact has been there in terms of number of taxes that had come down their overall tax rate has come down and of course the corporate tax rate for smaller companies with an over 250 crores is now come down.
To 25 from 30 that all has been positive but I think we will get full benefit of GST roll.
Out and other tax reforms next year when the filing becomes slightly more easy because it continues to be a cause for concern see the ranking has been done based on the work between.
So even that tax rate reduction etcetera has be prorated so the full year was not available for us to get the impact of GST okay because it is came in July and they only took data till December actually filing etcetera have become much simpler after that and usually they.
Got better after November itself so we are even though the simplified form is still not not out for you see.
For such a huge and massive reform I think the government has been acting very strictly with the concerns raised by the stakeholders so now already things.
Have improved dramatic and all this is going to show its impact next year on paying taxes okay if I could just link the GST experience and the paying taxes experience to what we’ve seen on trading across borders because one of the concerns specific to GST is the exporter refund issue and the government has tried to ensure that refunds are given out faster there’s been several camps and campaigns that have happened but this continues to be a cause for concern what is.
The survey tell you on that front see me when I mean Bal Bank was not looking exactly at this issue but of course independently this has been an important issue and customs GST they have really responded very well.
And there have been massively funds I think almost 19,000 roles have been refunded in the last seven eight months they say.
Work-in-progress things are getting better when you do such a massive reform in the country I think there is always going to be a slight transition process but it has dramatically improved.
Now okay what would be the the pain points that you would now like to work on because I know that the two or three aspects.
Where you would disappointed last year you’ve done significantly better and that’s taken up our overall ranking what would be the key focus areas from here on see after the recent amendment of the commercial quote and commercial divisions act we are we have been able to set up commercial codes in Delhi and Mumbai so our goal will be to see fast-track resolution of these commercial cases which are transferred now to this commercial course that will help us.
In the difficult indicator of compare enforcing contracts okay wasting property is another challenge lot of work has been done on digitization of records property records registry offices and cadastral maps and all that in Delhi.
And Mumbai things are better in Mumbai but I think we need to see the full thing done and that’s why there’s another challenge as I mentioned on IBC we hope that will be more recovery through resolution process and of course in paying taxes also things are going to improve so these are the major improvement that we are looking for in the next year and then again look forward to.
A substantial improvement let me ask you about the starting a business parameter where again we’ve we’ve seen a jump of about 21 points we’re now at 137 versus 158 last year what that you get that the survey is telling you in terms of.
You know where growth is headed in people wanting to get into business start enterprises see one of the biggest process renewing was done in starting business in the last two years.
The spice form has integrated the complaint corporation pant and in.
Everything we even came out with a you.
Know reserve unique name facility that you can actually reserve a name in just less than four hours but the.
Is though we have improved our DTF.
From 75 to 80 this year it doesn’t get fully reflected in the ranking because lot of countries are doing very well in this indicator okay so for breaking through in the top 50 or something you have.
To do some dramatic changes now we are hoping to combine GST registration EPF or ESIC registration will spice this year okay so that will cut down several procedures so.
Those are the kind of changes that we are looking for doing away with digital signature that we are trying to do that for last couple of years there have.
Been some issues but if that can be done that’s one procedure less so those if we are able to do those kind of changes actually we will do very well in starting business but the time taken for.
Come down quite dramatically yeah yeah you know you talked about dramatic changes being needed at least as far as the.
Starting business indicator was concerned where else do you believe the dramatic changes will be needed to be able to better the performance that you’ve delivered on not just this year but also the previous year see we I mean breaking into the top 50 I would imagine that.
That’s the goal for next year see in three indicators we are already in top 25 in two indicators were into top 80 so if we are actually talking it in five indicators within which three are in top.