Reflections on Budget 2022 – Ease of Doing Business
The union budget last week threw out a number of headline catching announcements around crypto currencies capital gains tax and the announcement that India will be creating its own digital currency. Whilst there was no movements in the tax rates which was a little disappointing given we have been campaigning for tax parity of foreign and domestic companies for a number of years now there was one announcement which would have been very pleasing for foreign companies.
Our Doing Business Survey in India which is in its 7th year now consistently shows the legal and regulatory impediments as the biggest barrier to doing business in India. The announcement then of the commitment to Ease of Doing Business 2.0 will be much welcomed. In her Union Budget address Minister Sitharaman stated that EODB2.0 will be a new phase guided by:
- Active involvement of states
- Digitisation of manual processes
- Integration of central and state records through IT bridges
- Standardisation and removal of overlapping compliances
India has travelled a long way since it first grasped the EODB drive, moving to 63rd position in the World Bank`s Ease of Doing Business index before the index was discontinued, a rise of almost 80 places since 2014. Even though the world rankings are no more, I am glad to see India is still driving this agenda forward with over 25,000 compliances reduced and 1,486 Union laws repealed recently. This aligns to the government’s commitment for ‘minimum government & maximum governance’.
Its often the incremental and simple changes which have the most positive effect and I for one am looking forward to seeing a continuation of this path, easing the bureaucratic burden for UK and foreign businesses in India.