In News:

• Compared to the situation prevailing in Indian courts (over 4.8 crore cases pending), India has made a remarkable progress in enforcement of contracts, bringing down the time taken for disposal of commercial cases by over 50%.
  • This was revealed by the Ministry of Law & Justice.
• The enforcement of contracts was a major drag on India's ranking in the World Bank's Ease of Doing Business.

What’s in today’s Article:

• Ease of Doing Business (EoDB) Index – About, India’s ranking, India’s major achievements, discontinuation of the index
• News Summary

The Ease of Doing Business (EoDB) Index:

• It is a ranking system introduced in 2003 by the World Bank (WB) Group.
• It ranks 190 economies based on aggregated information from 10 areas of business regulation (rankings and weights on each are used to develop an overall EoDB ranking).
• Higher rankings (a lower numerical value) reflect better or simpler business regulations, which is more conducive to starting and operating businesses and determining a country's ease of doing business.
• The report was discontinued by the WB in 2021, with ‘EoDB 2020’ to be the last ranking published by WB.
• 10 parameters in the index are:
  • Starting business; Dealing with construction permits; Getting electricity; Registering property; Getting credit; Protecting minority investors; Paying taxes; Trading across borders; Enforcing contracts; Resolving insolvency.

India’s EoDB ranking:

• In 2014, the Government of India launched an ambitious program of regulatory reforms aimed at making it easier to do business in India.
• As a result, India was one of the top 10 improvers, with an improvement of 67 ranks in 3 years.
• India has emerged as one of the most attractive destinations not only for investments but also for doing business.
  • India jumped 79 positions from 142nd (2014) to 63rd (2019) in 'EoDB 2020'.

India’s major achievements:

• Construction Permits:
  • India’s ranking on this parameter has improved from 184 in 2014 to 27 in 2019.
  • This improvement has been mainly on the account of a decrease in the number of procedures and time taken for obtaining construction permits in India.
• Getting Electricity:
  • India’s ranking on this parameter has improved from 137 in 2014 to 22 in 2019.
  • It takes just 53 days and 4 procedures for a business to get an electricity connection in India.
• Apart from these significant improvements, India ranks 13th in Protecting Minority Investors and 25th in Getting Credit.

Why was it discontinued?

• Following an investigation led by internal reports of data irregularities in its 2018 and 2020 editions (published in 2017 and 2019), as well as probable ethical issues involving bank staff, the WB suspended the practice of producing EoDB reports.
• There were reports of improper data adjustments made at the request of senior bank executives in four countries - China, Azerbaijan, Saudi Arabia and the United Arab Emirates.

News Summary:

• To make India a lucrative destination for foreign investments, a wide range of reforms were initiated by the Government of India since 2014, including -
  • Single-window clearances for industries,
  • Rollout of the GST,
  • Almost 100% online assessment of Income Tax cases,
  • Withdrawal of the retrospective taxation, and
  • Introduction of the automated system of e-way bills and customs clearances.
• According to the latest data of the Ministry of Law, India has made remarkable progress in enforcement of contracts (which had poor ranking in the EoDB), bringing down the time taken for disposal of commercial cases by over 50%. For example,
  • There is almost a certainty for settlement of all commercial disputes in 626 days (on average) in Mumbai and 744 days in Delhi.
  • This includes the time taken for filing of the case, trial and finally enforcement of the judgment.
• However, the overhaul of the justice delivery system took time, despite the central government’s attempt to establish commercial courts at the district level and other legislative amendments.
  • Repeated adjournments posed a significant challenge.
  • The e-filing method, electronic payment capability and setting a time limit for all of these courts to settle disputes gradually gained traction.
• Among the judicial reforms initiated,
  • A judge is shown green, orange or red light on his or her logbook, depending on the number of adjournments one has given in a case.
    • No more than three adjournments are allowed in a case.
  • Any infringement is recorded and used in performance evaluation of the judge during the time of his or her elevation to a superior court.