Pandemic reforms a boost for ease of doing business in India

The coronavirus pandemic is reshaping how the government is interacting with businesses and its citizens.

With the pandemic-related disruptions upending processes that need physical inspections and lengthy paper trails, the government is shedding its rigid ways to adopt new systems, including digitisation, to eliminate hurdles for businesses.

For instance, when finance minister Nirmala Sitharaman met businesses in mid-February when the outbreak was raging in China, the biggest fear conveyed by executives was a shortage of raw materials from India's northern neighbour, with supplies barely lasting two to three weeks.

That set off a series of steps to overhaul India's handling of cross-border trade. And, on June 8, a critical experiment in customs reforms—faceless assessment—went live. Such assessments have now been rolled out at Chennai and Bengaluru, starting with mechanical, electrical and electronic machinery, and will be gradually scaled up across the country by the end of the year.

The idea is to eliminate discretion in decision-making, ensure physical distancing and fast-track clearance of goods, saving time and costs for importers.

M Ajit Kumar, chairman of Central Board of Indirect Taxes and Customs, earlier this week told field officials to "leave no stone unturned" in rolling out and scaling up faceless assessment to make it uniform and speedy. "Faceless assessment would be a complete departure from existing manner of customs assessment," Kumar told officials in a June 8 letter reviewed by Mint.

Industry executives said that the move will particularly benefit small businesses.

"It will help in avoiding delays even if officials are not able to be physically present at workplace during the pandemic," said Chandrakant Salunkhe, founder and president of SME Chamber of India and SME Importers Association of India.

In its ease of doing business reports, the World Bank had flagged cross-border trade as a key area that needed reforms. In its 2020 report, India was among the top 10 countries that made progress in ease of doing business, including in cross-border trade.

The disruptions caused by the pandemic gave it momentum, with the government announcing round-the-clock clearance of goods at all customs facilities on February 20, followed by a series of steps to simplify procedures.

That included setting up a single-window Covid-19 helpdesk, automated release of consignments all over the country from March 5, provisional clearance of goods with preferential treatment without original certificate of origin, personal hearing through videoconferencing, a drive to clear pending refunds and exemption of demurrage charges during the lockdown.

Disclaimer: This article first appeared on Hindustan Times, and is published by special syndication arrangement