Ease of doing business gets a push

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Bikky Khosla | 10 May, 2016
The Lok Sabha passed the Insolvency and Bankruptcy Code last week. This is a welcome development. Currently it takes around four years to wind up an ailing company and the Bill proposes to bring this time down to 180 days, extendable by another 90 days. This means if a business is not doing well, it will be able to get out faster. Lenders, on the other hand, will get a legal way for faster recovery of dues in a time-bound way. The Bill has yet to be passed by the upper House, but I hope this legislation will soon be a reality since members from this House too were part of the joint committee which had earlier cleared the Bill.

In another development, the Centre has broadened the ambit of its Merchandise Exports from India Scheme (MEIS). Earlier, out of 5,012 tariff lines covered under the scheme, benefits to 2,787 lines were available only if they were shipped to specified regions, and it required submission of landing certificates for claims. But now the market coverage has been extended to all countries in respect of these 2,787 lines and landing certificates will no more be required under the scheme. This move will help the sector as exporters were facing difficulty in getting landing certificates. It will bring down time and cost of exports.

The recently launched dashboard on EXIM Analytics has also come as good news. Last week, the Commerce Minister launched this platform, which will help analyze export-import data by time period, destinations and ports. I hope the EXIM community will find this platform useful. It is also reported that the government has started the process for issuance of Unique Business Identification Number (UBIN) to enable entrepreneurs set up their business without any delays. These initiatives deserve praise. I believe such small, incremental reforms aimed at improving the ease of doing business and enhancing transparency have potential to make a big difference in the long run.

Meanwhile, the Public Accounts Committee of Parliament has expressed concern over irregularities and misuse of the 100 percent Export Oriented Unit (EOU) scheme. The Committee has clearly pointed out "grave nature of the irregularities", "large-scale misuse" and "enormous amount of revenue foregone" and recommended a detailed inquiry into the manner of operation of this scheme. In the past, such complaints were raised time and again, but little attention was paid to them. This time I hope some tough measures would be taken to prevent such things from happening again.

I invite your opinions.