Timely Labor Reforms Yields Ease Of Doing Business

The progressive outlook of ease of doing business 3.0 has its roots firmly planted in the “Make in India” psyche of the current administrators. Today’s globalized business world requires that the openness toward performing trade across borders, bringing in foreign direct investment, and resolving insolvency are the primary factors that determine the measure of ease of doing business. India keeps these factors in mind and scores on par with some of the best-ranking nations like the Korean Republic and the United States. In the final tranche of the Rs. 20 lakh crore stimulus package announced by FM Nirmala Sitharaman, several reforms to seven sectors, one of them being ease of doing business was also included.

Ease of doing business in India

Ease of doing business at any given point refers to the quickness of clearance of permits, the seamlessness of checks for meeting compliance standards and paying taxes, ease of establishing new businesses, and ease of operations of existing businesses. India’s journey towards ease of doing business 3.0 spans a variety of areas including logistical factors such as availability of cars and transport vehicles, high-speed internet, and production of electricity, cement, and steel among many other things. A valid example is that of the merge of 13 labor laws into a single code. The proposed Code on Occupational Safety, Health and Working Conditions Bill, 2019, would simplify and codify workplace safety and welfare conditions for any outfit that brings 10 or more workers together.

In the wake of the COVID-19 crisis, supply chains came to a grinding halt. The need for reimagining the complex laws and rules of doing business became imminent. But a more fertile playground than India for the enterprising mindset cannot be found. With ease of doing business 3.0 reforms, India brings in shortcuts that save time and legwork. The Indian government’s handling of the current crisis in this regard has been admirable. It follows an optimistic trend that was set even before the coronavirus was heard of. Last year, India’s EoDB ranking in the World Bank listings moved from 77 to 63. This, hopefully, should see a spike in the next ranking session.

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Keeping the single-point focus on offering land reforms so that manufacturing units can be strengthened, the latest initiatives include using housing complexes for rental dwellings, allowing them to follow the BOT model. This initiative will inspire many players to make an entry into these affordable housing segments.

Another related point is the ease of transportation. 1600 ‘shramik’ train routes are flagged off so that able, work-ready migrants ease the bottleneck of short-handed supply chains while stranded ones return home. Smart ration cards linked to the government-issued identification proof Aadhar allows the immediate needs of food to be met. This initiative also allows for the easy formalization of employment. Kisan credit cards for farmers, growers of livestock, and fisher-folk extend a credit line of Rs. Two Lakh Crore exclusively to this sector of the population. The Employee Provident Fund Organization allows the use of e-signs on its online portal and email for logging requests and registrations. Such intuitive measures ease the compliance process.

Reducing the complexity of compliances is also high on the list of ease of doing business 3.0. State reforms and the extension of the PMAY (Pradhan Mantri Awas Yojana) scheme up to March 2021 ensure that laborers can access housing plans at lower interest rates.

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By managing the ease of doing business 3.0 goals through labor-centric, humane policies, the government achieves the two-pronged benefits; of addressing the concerns of economically-weaker sections of the working population, while also renewing the economy that underwent an enforced dull phase. These inflows are evidence that India’s twin measures of reigning the spread of the coronavirus and increasing labor-friendly law changes are moving in the right direction.


  • Press Trust of India, Covid-19: Govt working on many initiatives to attract potential investors, Business Standard, May 10, 2020
  • Ministry of Labour and Employment, “EPFO introduces email mechanism to obtain e-Sign….”, Press Information Bureau Delhi, May 6, 2020
  • Financial Express online, Nirmala Sitharaman Highlights: Migrant worker, small farmer, street vendor crisis answered; PMAY scheme extended, May 14, 2020

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