UK India Business Council recently completed its Fifth Annual Doing Business in India Report and it observed that it was getting easier for the British businessmen to do business in India. What they significantly pointed out was that the level of corruption had dropped to 17.5 per cent in 2019 as per the respondents as against about 50 per cent in 2014 when Mr. Narendra Modi came to power at the centre.

Overall, the survey respondents were positive about India, with 56 per cent stating that it is getting easier to do business in India, and only 21 per cent saying that it has not improved (while 23 per cent were undecided). The most persistent barrier to doing business continues to be ‘legal and regulatory impediments’, which were cited by 59 per cent of respondents as a major barrier. 'Identifying a suitable partner' and ‘taxation issues’ are the next two most cited barriers.

The most popular reform among UK businesses is ‘improving the quality of bureaucracy, with 28.6 percent of respondents urging the Government of India to act in this area. The second most popular reform request was related to the bureaucracy, with 16.9 per cent of respondents calling for a ‘simplification of the Goods and Services Tax (GST)’.

According to the Report, calls for the simplification of GST have reduced from 24 percent in 2018, reflecting that companies are coming to grips with India’s new tax system, and India has improved its implementation since the original rollout.

The Government of India announced the reduction of India’s corporate tax rate (from 30 per cent to 25.17 per cent after cess and surcharges are accounted for) prior to the completion of the survey, perhaps one reason as to why India’s previously high corporate tax rate was not mentioned by the respondents.

The highest scoring aspects of the Indian business environment continue to be tele-communication facilities, closely followed by the availability of skilled labour, the availability of support and service providers, and the availability of supply chain.

For the first time, the UKIBC canvassed views on how India’s States and Union Territories are performing on the ease of doing business. When asked “which states are making the most improvements on business environment?”, Maharashtra was the clear winner, with 36.67 per cent of respondents giving it the honour, followed by Delhi, which captured 20 percent of the vote.

UKIBC Chief Executive, Richard Heald, OBE, said that, “The findings of this report reflect the long-term advantages of the huge and growing Indian market. There have been improvements, particularly in tackling corruption, but there is clearly much still to do to remove the persistent barriers to doing business, particularly when it comes to improving bureaucratic procedures and the application of the tax regime, which is a persistent concern for UK and, indeed, all businesses in India”.

Heald went on to say, “The UKIBC and our members look forward to our continued dialogue with governments across India, and we remain fully committed to working together to further improve the ease of doing business”. (IPA Service)