Ease of doing business: How India improved its ranking
For the first time, India jumped a record 30 places to 100 in the Ease of Doing Business report for 2018, which is an influential 190-country barometer of competitiveness that many businesses likely consider for investment decisions.business Updated: Nov 01, 2017 09:12 IST
One among top ten improvers, highest jump in rankings among 190 countries, improvement in eight out of 10 indicators to show that India is closer to global best practices in regulatory framework for business; all this was achieved by the Narendra Modi government as exemplified by the World Bank’s latest report on Doing Business 2018.
As India jumped 30 places to break into the top 100 countries for doing business, the best performance has been in four out of 10 parameters: Paying taxes, resolving insolvency, access to credit and protecting minority investors.
Online payments to Employee Provident Fund and administrative measures to simplify corporate income tax regulations led India to jump 53 places from 172 to 119 on the ‘paying tax’ parameter.
Enactment of the Insolvency and Bankruptcy Code and action under it helped India move from 136 to a rank of 103 in the ‘resolving insolvency’ parameter.
India has improved its rank in 6 out of 10 parameters, while it moved closer to global best practices in 9.
The World Bank report, covering the period from June 2, 2016 to June 1 this year, ranked India top among the South Asian nations. This report comes as a shot in the arm for the Modi government which is focused on taking India to the top 50.
World Bank complimented India’s initiative of ensuring that the structural changes in easing regulation around business is not only limited at the national level but has percolated to the local. But it also warned that to sustain the momentum and improve rankings, the government has to identify pain points and carry out reforms, year after year.
“Year after year, persistent efforts have to be made after identifying areas of improvement. This needs a whole lot of government commitment not only at the national level but also at the local level, at every layer of government,”said Annette Dixon, vice president, South Asia region.
The findings of the report underlines how initiatives by both the states and the Centre are crucial. India mostly lags in parameters where state government interference is maximum: registering a property, starting a business or getting an electricity connection.
Though India improved its position by six ranks – from 185 in 2016 to 181 in 2017 – vis-a-vis getting construction permits, its position dropped by 16 ranks in another indicator – registering properties.
The number of cities which will start issuing online permits will go up by March 2018.
Union housing and urban affairs minister Hardeep Singh Puri told HT, “By March 2018, construction permit will go online for all 500 cities selected under the government’s urban upgrade scheme, Atal Mission for Rejuvenation and Urban Transformation.”
Ironically, despite improvement in number of days required to start a business in India, the country’s rank dropped one place, because the ranking is relative to performance by other countries.
It takes 30 days now to register a new business, down from 127 days 15 years ago, but “the number of procedures is still cumbersome for local entrepreneurs who still need to go through 12 procedures,” the report said.