The Confederation of Indian Industry's (CII) survey report highlighted land procurement, environment clearances, construction permits, industrial safety permits and power connection as the top five obstacles in starting a business. India continues to rank low in the World Bank’s ranking on the ease of ‘Doing Business’ for 2014. India’s position slipped to 134 against 131 in 2013 and placed lower than Brazil, Russia, China and South Africa.
The CII’s survey, which carried out in association with KPMG, noted that it has become imperative for India to have an environment that facilitates entrepreneurship, promotes investments productivity and growth for improving business climate in India. Stringent labour laws, problems in securing land and tax woes are among the critical issues that need to be addressed in order to attract global investors.
The report highlighted that most companies believe that the Indian direct tax regime is not conducive to fostering growth. 90 per cent of the respondents are in favor of reduction in tax rates, while 92 per cent feel there are challenges in transfer pricing assessments. Therefore a reduction in corporate taxes could provide impetus to growth of business. The CII further noted that taxation in India needs structural, operational and administrative reforms and the burden of tax compliance should be reduced besides enabling e-filing of all taxes, the report added. On land acquisition issue, the report added that companies keen on setting up a business in India need to undergo a time-consuming and tedious process, with the average time taken to acquire land being 14 months. The report indentified key areas for reforms which will enable doing business in India easier, including setting up of land acquisition, business, taxation and contract enforcement.