Improving India’s ranking in the World Bank’s ease of doing business index is “reasonably possible” if various machineries, including the tax department, make concerted efforts to improve the three laggard parameters, Finance Minister Arun Jaitley said on Saturday.
He also said that WTO talks have not made much headway in most areas except trade facilitation, which helps cut costs and make it more efficient.
“Therefore, even without international agreement to that effect, it is even within larger benefits and interest of our domestic economy to ensure that trade facilitation takes place,” he said addressing officials on the International Customs Day.
Citing success achieved by India in Ease of Doing Business ranking, Jaitley said the country has moved ahead from 142 to 100th position in the last three years and the last 30 being in one year.
“The Prime Minister has given us goal that we must try and come within first 50. So, at a time when you were at 142, to come within first 50 is somewhat challenging,” he said.
He added that out of the 10 criteria which the World Bank follows there are actually three that need to be improved — one relating to municipal permission of land and buildings, the other is trading across borders and third one is contract enforcement.
Exhorting officials of the customs department to improve India’s ranking in trade facilitation parameter, Finance Secretary Hasmukh Adhia said: “All of us together have to work harder to ensure that our ranking in that particular item, which is 146 as of now, we must make it within 100 as early as possible. If not within a year, within two years.”
Adhia asked the official to take this as a challenge and focus on this during the year.
Jaitley also said that the Department of Industrial Policy and Promotion is working on the improvement in the three laggard parameters.
“With these, to come down substantially below 100 is reasonably possible. And in one (trade facilitation) of them customs department has a role,” he said.
“You have twin role to play that whereas you have to play role of detection machinery to ensure evasion doesn’t take place, at the same time you have to be a facilitator which makes entry into border itself fairly easy”. Jaitley added.
“How do you blend these two somewhat a contradictory challenge and bring the balance between the two, I think with experience of your service you would be able to do this.”
On the role of customs and the entire tax department, Jaitley said it has been evolving with changing nature of economy and with increased tools of technology now being available.
“As the economy itself has expanded the nature of each of these taxation departments also have to change. In income tax, the base is becoming larger. It is bound to enlarge and therefore charging higher rates from few selective groups which has traditionally done is an area which has been changing,” he said.
The finance minister unveiled two technology platforms — ICETRAK and ICETAB designed by Central Board of Excise and Customs as part of effort towards improving ease of doing business.