The Ministry of Corporate Affairs (MCA) has established a 20-member committee to make recommendations to improve the regulatory environment for conducting business in India. Some of the background to this effort is contained in the MCA’s office memorandum:
1. The report of The World Bank and the International Finance Corporation, entitled “Doing Business 2012: Doing business in a very Transparent World”, India has been ranked at a low of 132 amongst a sample of 183 countries. Although, there is a seven – point improvement over 2010 ranking of 139. However, India continues to lag behind even the BRIC and SAARC countries on most of the parameters.
2. Easing of business environment mandates extensive examination of regulations in different areas of root functioning such as financial reforms, governance reforms, liberalized policy framework, process reforms, etc.,. Thus there is a need to conduct an in-depth study into the entire gamut of regulatory framework and come out with a detailed roadmap for improving the climate of business in India in a time bound manner. Such an exercise needs to be undertaken for periodical improvement in the ranking, leading to a situation where India gradually moves towards upward position with almost zero hassles.
The committee is expected to hold consultations and invite opinions, and present a report in six months.Unsurprisingly, this comes close on the heels of various concerns regarding policy paralysis and retrograde steps that have resulted in India’s image waning as an investment destination. While this is likely to assuage some of the concerns from a perception standpoint, it is not certain if the consultation and recommendations could result in concrete measures given that the terms of reference of the committee are somewhat wide and open-ended.