Exclusive | Ease of doing business likely on govt's focus in Union Budget

The recent Jan Vishwas bill aims to decriminalise 183 minor offences under 42 Union Acts.

Budget 2024-25 is likely to focus on ease of doing business including decriminalisation of certain offences and labour laws for which initial rounds of inter-ministerial discussions and talks with stakeholders have happened, sources said.

Ease of doing business needs to be a top priority for India which has one of the largest workforces. India needs to take several measures to make it easier for doing business. Measures are required in procedures, taxation and labour laws, among others. Labour laws comprise 68.2 percent of the criminal provisions.

“The government is focussing on improving ease of doing business whether it is decriminalisation of various offences or related to labour laws. The Union Budget 2024 is likely to focus on it. There have been inter-ministerial meetings involving the Commerce Ministry and the NITI Aayog on ways to boost ease of doing business. Commerce Minister Piyush Goyal has also chaired these meetings. Stakeholder discussions on easing of labour laws have happened,” a person aware of the development told Moneycontrol.

The government is likely to look at further decriminalisation of offences in the upcoming Budget 2024-25 in which labour laws may feature prominently, he added.

Jan Vishwas bill

The recent Jan Vishwas bill aims to decriminalise 183 minor offences under 42 Union Acts. Among these, 23 Acts containing 113 compliances affect entrepreneurs. Of these, the top five Acts that account for 52 percent (59 of 113) of the total number of compliances proposed to be decriminalised are The Merchant Shipping Act, 1958, The Environment (Protection) Act, 1986, The Air (Prevention and Control of Pollution) Act, 1981, The National Housing Bank Act, 1987and The Prevention of Money Laundering Act, 2002. But decriminalising 183 of a  whopping 26,134 provisions does not move the needle significantly.

Labour laws

Since 2019, the country’s labour laws have been going through an overhaul with the conversion of 29 Union Acts into four codes. Initial observations on the draft rules published by the Union and State Governments indicate that criminal provisions in labour laws will be reduced by approximately 80 percent. The new labour codes which subsume 29 labour legislations have been on a halt, they are a critical reform. The new labour codes were introduced by Parliament back in 2019. The labour codes will form an essential tool to facilitate ease of doing business. The Four Codes are: The Code on Wages, 2019 (the “Wage Code”); The Occupational Safety, Health and Working Conditions Code, 2020 (the “OSH Code”); The Code on Social Security, 2020 (the “SS Code”); and The Industrial Relations Code, 2020 (the “IR Code”).

“The Central Government has got the consent of most of the states and union territories on these,” he said.

Ease of doing business ranking

The World Bank’s Ease of Doing Business Survey, where India rose from 142 in 2015 to 63 in 2020, has been discontinued. India has been doing well in the global ranking with respect to ease of doing business for the past few years. But the World Bank discontinued this annual exercise after an investigation revealed that China may have influenced the 2018 study and managed to boost its ranking.