Measures to enforce contracts are not up to par and State governments need to be more aggressive in establishing commercial codes, according to Shailendra Singh, Additional Secretary, Department of Industrial Policy and Promotion (DIPP).
For long there has been a perception that it was the Judiciary’s role to enforce contracts. But a study of top 50 countries shows such reforms have been driven by the Executive, which can work with the Judiciary. Establishing commercial codes will help in enforcing contracts. MSMEs wait 4-6 years for contracts to be enforced and this is an area of concern, he said.
Addressing a regional conference on ease of doing business in South India organised by the CII, he said the DIPP has given 372 specific action points for State governments in its business reform action plan. This year “will be a watershed year” for ease of doing business has more than half the States will have complied with all the reform points suggested by the DIPP.
In the coming year, the action points will be expanded to 450 including labour regulations and land registration. The Department is “toying with the idea” of linking Aadhaar to land registration to avoid people from having to go to Registration office even once for biometrics.
Apart from State governments detailing the implementation online, the DIPP this year is seeking industry’s feedback to rank the States in ease of doing business. More weightage will be given to industry opinion in the coming year while ranking States, he said.
Industry representatives want law and order among the parameters in ranking States in ease of doing business. The Department is discussing this with State governments, he said.
Singh said there are more than 3 lakh applications for trade licenses across the country. Trade licenses and registration of societies will be brought under the Public Services Delivery Act to ensure all these are cleared in the current year.
S Mahalingam, Chairman – CII-Southern Region Subcommittee on Economic Affairs & GST, said construction permits, registration of businesses, trading across borders and enforcing contracts are some of the `laggard areas’ in ease of going business. Alternate dispute resolution mechanisms such as arbitration, mediation and conciliation are needed to bring down case loads in courts.
CII hopes to prepare a model state budget to ensure allocation of resources for ease of doing business. This will be ready in a month and will be presented to State governments, he said.