Ease of doing business Current Affairs - 2019
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Prime Minister Narendra Modi launched Ease of Doing Business Grand Challenge on resolving seven identified Ease of Doing Business problems with use of cutting edge technologies. It was launched during programme organized by PM for interaction with select CEOs from Indian & foreign companies.
Ease of Doing Business Grand Challenge
The objective of this challenge is to tap potential of young Indians, startups and other private enterprises to provide solutions to complex problems using current technology. It is in pursuance of Government’s resolve to make India one of the easiest places to conduct business in the world. Government has made efforts to ensure that India consistently improves its business environment. This challenge is aimed at attracting innovative ideas on artificial intelligence (AI), Internet of Things (IoT), big data analytics, blockchain and other cutting edge technology to reform government processes. The platform for this grand challenge will be on Start Up India portal.
In World Bank’s Doing Business Report (DBR, 2019) released in October 2018, India has recorded jump of 23 positions against its rank of 100 in 2017 to be placed at 77th rank among 190 countries. As result of continued efforts by the Government, India has improved its rank by 53 positions in the last two years and 65 positions in the last four years (2014-18). In 2014, India was ranked 142nd among 190 nations. World Bank’s Ease of Doing Business index ranks 190 countries based on 10 parameters, including starting a business, construction permits, getting electricity, getting credit, paying taxes, trade across borders, enforcing contracts, and resolving insolvency.
Union Cabinet has approved proposal for promulgation ordinance to amend the Companies Act, 2013. The ordinance had received assent from President Ram Nath Kovind under Article 123 and has been promulgated. The amendments to the Act are aimed to promote ease of doing business as well as ensure better compliance levels.
The ordinance to change Companies Act seeks to declog National Company Law Tribunals (NCLTs) and decriminalise minor offences by companies. The ordinance will transfer 90% of the cases to regional directors under Ministry of Corporate Affairs from NCLTs. Moreover, it will retain status of all non-compoundable offences since they are serious in nature.
Union Government-appointed Committee (headed by Corporate Affairs Secretary Injeti Srinivas) had suggested various changes to Act, including restructuring of corporate offences under companies law and in-house adjudication mechanism to ensure that courts get more time to deal with serious violations.
Apart from restructuring of corporate offences to relieve special courts from adjudicating routine offences, the committee had mooted re-categorisation of 16 out of 81 compoundable offences under the Act. This move was recommended to bring down NCLT’s load as it looks at insolvency and bankruptcy cases as well.
It also recommended disqualification of directors in case they have directorships beyond permissible limits and capping an independent director’s remuneration. It also had suggested that remuneration any independent director gets from company should be capped at 20% of his gross income in year to prevent any material pecuniary relationship, which could impair their independence on the board.