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The Indian economy, often referred to as an elephant, is in dancing mode as reforms and ease of doing business measures start showing results on the ground, legal experts tell 'India Investment Journal' in this review. The Indian economy continues to be one of the fastest growing economies in the world. Analysts attribute this growth to reforms initiated by Prime Minister Narendra Modi's government, including e-governance to remove the physical interface between citizens and bureaucrats, inclusive growth by connecting 180 million new bank account holders mostly from rural India to the commercial banking system, freeing up more sectors for foreign direct investment (FDI), the Make In India initiative push to the manufacturing sector, and increasing government spending on key areas like infrastructure. Moody's Investors Service has predicted that the economy in this South Asian giant is set to grow at a steady rate of 7.5 per cent in 2016 and 2017. The World Bank's 'Doing Business' Report 2016 hailed the regulatory reforms adopted by the Indian government and the various state governments, more specifically the single-window system for processing building permit applications in Mumbai. In the past year, India jumped four spots and now ranks 130 out of 189 countries that the report studied in terms of ease of doing business. The biggest improvement for India was jumping 29 spots to rank 70 in the list of countries with ease to access of electricity. India's FDI inflow for the financial year 2015-2016 was $55.46 billion as compared to $36.04 billion for 2013-2014. The Indian government recently also did a major overhaul of India's bankruptcy laws, which were more than a century old, with the Indian Parliament passing the Insolvency and Bankruptcy Code 2015. According Mr Jayant Sinha, India's minister of state for finance, the country is currently drafting a new legislation to help in the quick winding up of stressed banks, Non-Banking Financial Companies and microfinancing institutions, which all point toward allowing quick and clean exits to investors, should they require it. The Indian government has also passed an enabling law to effect the enforcement of contracts and improve efficiency in commercial transactions by enacting the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act 2015, which now enables setting up a Commercial Court at the District Level and a Commercial Division in a relevant High Court. The Arbitration and Conciliation Act 1996 has also been amended and now features a 12-month fast track arbitration procedure to further support ease of enforcement of contracts. A National Company Law Tribunal has been constituted to replace the earlier Company Law Board and cases involving corporate entities have been transferred to the newly formulated Tribunal. Labour reforms, though, continue to be a distant dream. While states like Rajasthan and Madhya Pradesh have led the pack in regional labour reforms by allowing industries that employ less than 300 persons to wind-up without central government approval, most Indian states still keep this number at a meagre 100. The government would attract more investment in the manufacturing sector if the number was increased to at least 1,000 across the board. Corruption in the lower bureaucracy has also been a plague India is trying to root-out. While the higher bureaucracy is considered to be considerably 'clean', it is the lower bureaucracy that takes most decisions at the ground level. A major overhaul is also required for the banking sector in India with both interest rates and the number of non-performing assets remaining high. The ongoing reforms, however, all point to a major overhaul in the way commercial disputes will be dealt with in India, and have been implemented by the Narendra Modi led government to welcome investors to India with a long-term vision. The Indian elephant, as the Indian economy is oft referred, is dancing, and how!
