To improve India’s contract enforcement record, which has a direct bearing on the ease of doing business in the country, the Department of Industrial Policy & Promotion (DIPP) has requested the law ministry to introduce an ordinance that allows the government to open fast-track commercial courts in Delhi and Mumbai.
Better enforcement of contracts will help India improve its ranking in the World Bank’s ease of doing business index. Under the “enforcing contracts” indicator, the country is currently ranked 172 out of 190 countries.
Though the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act passed in December 2015 allows state governments to set up commercial courts at the district level, no commercial court can be constituted in Delhi, Mumbai, Kolkata and Chennai- areas where high courts have exclusive civil jurisdiction to hear commercial matters.
The ordinance requested by DIPP will amend this provision. District commercial courts can then be set up in Delhi, Mumbai and other metropolitan areas of the country.
India’s overall ranking in the ease of doing business index improved by just one notch to 130 in its 2017 report from a revised rank of 131 last year, highlighting a gap between policy measures and their implementation. To make it to the top 50 , the National Democratic Alliance (NDA) government at the centre has prepared an eight-point strategy.
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