India is on the verge of enabling easy entry and exit for businesses. A new Bankruptcy Law and a slew of other reforms are poised to do just that, Economic Affairs Secretary Shaktikanta Das tells Forbes India in an interview. Excerpts:
Q. India has improved on the ease of doing business. Are you happy with the performance?
We note with satisfaction our improvement in rank from 142 to 130 [on the ease of doing business]. But there is a lot of unfinished work and it is being done. We could have done far better this year. But the World Bank in their analysis wants to see how changes play out for one year and only then will it give it the due weightage. We did not get marks for many of the decisions which were taken in the last six months. But these decisions would have run for one year when the next rating comes.
Q. So you see a significant improvement in the ranking for next year?
Yes. What is more important is that the World Bank has specially recognised the important steps in the area of reforms taken by the government. All the departments of the government have worked together, whether it is corporate affairs, department of revenues, excise and customs, income tax, ministry of labour, EPFO. So it is very satisfying. I would expect India’s ranking to improve significantly next year.
Q. Is the government still confident of breaking into the top 50 ranks in three years as Prime Minister Narendra Modi promised?
That is our target and we are working towards that.
Q. Where do the challenges remain?
It is a mixed bag. Several states are cooperating and are moving very fast. For example, Maharashtra has simplified its building permission rules. Some states need to move faster. The positive thing is that no state is against it. All states are on board, but depending on local factors, some move fast, some do not.
Q. How soon can we hope to see the Bankruptcy Law come into effect?
The Viswanathan Committee on Bankruptcy Law has submitted its report and it is in the public domain. We are expecting comments from the stakeholders and others. It has been referred to the various ministries and states for their comments. It will be our endeavour to introduce the Bill in Parliament as early as possible.
Q. In the coming session of Parliament?
Let us see… In India, it is easy to start a company, but very difficult to wind it up. It becomes like a chakravyuh [labyrinth]. The Bankruptcy Law will deal with the problems of the companies. If a company is facing bankruptcy or it is a case of business failure, anybody, whether workers or bank or shareholders, can invoke the provisions of this new law.
(This story appears in the 11 December, 2015 issue of Forbes India. To visit our Archives, click here.)