Q1- Recently, Niti Aayog has launched the ‘Ease of Doing business report’, what are the major findings of this report?What are the major government measures to bring India’s ranking on “ease of doing business” at par with the global ranking?
Niti Aayog recently launched the Ease of doing business report based on an enterprise survey of manufacturing firms across the nation.
The ease of doing business report comes in the backdrop of the fact that India needs to create an environment that fosters globally competitive firms, capable of driving and sustaining economic growth.
The major findings of this report are as follows:
1- Economic Performance and Reforms:
- A higher level of economic activity and better performance on a range of doing business indicators are strongly correlated in this report. Firms located in high-growth states also report 25 per cent power shortages as compared to firms n low-growth states.
2- Improvements over time.
- Newer and younger firms report a more favorable business environment in that they take less time in obtaining approvals than older firms, suggesting an improvement in the business environment.
3- Informational gaps:
- The survey data show low awareness among enterprises about single window systems, instituted by states.
- On average, only about 20% of start-ups, which are of recent origin, report using single window facilities introduced by state governments for setting up a business.
4- Labor regulations are a bigger constraint for labor intensive firms.
- Labour intensive sectors, that create proportionately more jobs per unit of capital investment, feel more constrained by labor related regulations.
5- Barriers to firm growth:
- Larger firms face more regulatory barriers than smaller firm. They incurred higher costs for getting approvals.
- Larger firms took significantly longer time to get necessary approvals than smaller firms.
Government has taken the following steps for improving ease of doing business in India:
- Government has been making efforts to further improve the ease of doing business and aims to bring the country in the top 50.
- Reduction in number of documents for foreign trade.
- Online application for environment clearance.
- Improvements have been made in regulatory environment through Deregulation, delicening, simplification of procedure.
- Action plan has been formed for improving the regulatory environment.
- New sectors have been opened to FDI and partnership has been forged between industries and the government through positive mindset
- Government has also focused on creation of modern and efficient infrastructure
- Allotment of PAN and TAN cards has been simplified and CIN/Corporate Identity Number has been included as proof of identity
- Indirect tax front initiatives have also been promoted to improve ease of doing business.
- Introduction of e-biz project for single window clearance
- Mandatory filing of all returns on-line through a unified form.
Q.2 Discuss the benefits and challenges for India in maintaining its relationship with RCEP?
What is RCEP?
- The Regional Comprehensive Economic Partnership (RCEP) is a proposed mega-regional Free Trade Agreement (FTA) between 16 Asia-Pacific countries including the 10-member ASEAN countries, China, Japan, India, South Korea, Australia and New Zealand.
- RCEP negotiations were formally launched in November 2012 at the ASEAN Summit in Cambodia.
What are the immediate benefits to India from RCEP?
- The RCEP agreement would complement India’s existing free trade agreements with the Association of South – East Asian Nations(ASEAN) and some of its member countries, as it would deal with Japan and South Korea.
- It will help address challenges originating from implementation concerns vis-à-vis overlapping agreements, obstructing effective utilization of these FTAs.
- The RCEP would help India simplify the rules and regulations of doing trade, which will reduce trade costs.
- The RCEP would reduce the potential negative impacts of TPP and TTIP on the Indian economy.
- The RCEP will facilitate India’s integration into sophisticated “regional production networks” that make Asia the world’s factory.
- With using domestic policy reforms and harmonization of rules and regulations would help Indian companies plug into regional and global value chains and would unlock the true potential of the Indian economy.
- There would be a boost to inward and outward foreign direct investment, particularly export-oriented FDI.
- ·India is well placed to contribute to other countries in RCEP through its expertise in services, not only consolidating the position of the region as the world’s factory but also developing it as the world’s hub for services.
- RCEP will influence new investment decisions in textiles, leather, processed food, machinery and electronic component sectors.
- This will happen on account of the common Rules Of Origin (ROO) framework and the entry of China as the new FTA partner of Japan, India and Australia.
- By setting up manufacturing joint ventures in India, China can effectively reach India’s domestic market and also a large European market once India signs an FTA with the European Union.
What are the Challenges in front of India regarding RCEP?
- Tariff barriers, which have been a matter of discontent in bilateral FTAs, is great matter of concern.
- Sadly, India has not done enough to minimize tariff barriers; it needs to do more.
- Non-trade issues such as environment and labour are likely to be prickly as well and need greater.
- India must take steps to strengthen its Medium, Small and Micro Enterprises (MSME) sector, equipping it not only to survive the free flow of trade, but also to become a set of more competition.
- India has to be firm and calculative in terms of taking tough policy decisions, while working tirelessly on capacity building of its domestic industries.
- The successful conclusion of the RCEP negotiations would serve as a fresh move towards regional integration and unleash economic linkages that would be immensely beneficial for all involved.
- The negotiations would attempt to hand pick the best features of existing Asian FTAs and use them as a basis for negotiations to maximize quality.
- The negotiations must set clear timetables for concluding talks and actively pursue reforms deeper than any attempted before.
3) The Rohingya tribe in Myanmar is going through a human rights crisis. Discuss the causes Rohingyas crisis in Myanmar. Also, bring out India’s stand of India on the Rohingya crisis.
- In Myanmar/Burma, the Rohingya are living with very limited access to basic services and almost negligible livelihood opportunities due to strict movement restrictions.
Cause of the recent conflict
- Violence broke out in 2012, when a group of Rohingya men were accused of raping and killing a Buddhist woman.
- Groups of Buddhist nationalists burned Rohingya homes and killed more than 280 people, displacing tens of thousands of people.
- Since 2012, the region’s displaced population has been forced to take shelter in filthy refugee camps.
- On October 9 2016, three border posts on the border of Myanmar and Bangladesh were attacked by a group of Islamic militants leading to the death of nine policemen.
- The attack, that was reported to have been carried out by Rohingya Solidarity Organisation, was soon followed by a counter terrorism insurgency carried out by the Tatmadaw (Burmese military).
- The conflict intensified on August 25, 2017, when Muslim insurgents of Rohingya origin attacked security posts in Rakhine.
Where does India stand on the issue?
- India has maintained a cautious stance.
- India has been receiving Rohingya refugees and allowing them to settle in different parts of the country over the years particularly after the communal violence in Rakhine state in 2012.
- In December 2012, External Affairs Minister Salman Khurshid visited Rakhine state and donated $1 million for relief in the violence hit state.
- However, Delhi has not made any official pronouncement.
Why such distant stand by India?
- Rohingya crisis is irreconcilable and unresolvable. All that can be done is try to mitigate it.
- With India having no solution or expertise to offer, it is a good reason to stay away.
- India has real security interests which depend on the goodwill of the Myanmar regime.
- In 2015, for instance, following an attack by Naga rebels on a security convoy in Manipur, Indian forces carried out a covert raid across the border – with the quiet nod from Yangon. Delhi does not want that trust to be eroded.
- A new Muslim militant minority across India’s eastern border poses a severe security threat to the stability in Bangladesh and, in turn, across Assam and northeast India.
- Several thousands of Rohingya refugees already reside in India and with support from activists they could disrupt Delhi’s relations with Myanmar.