India
has jumped 30 places to rank 100th in the World Bank's 'ease of doing
business' ranking, helped by a slew of reforms in taxation,
licensing, investor protection and bankruptcy resolution. The ranking
comes as a shot in the arm for the Narendra Modi government amid
dissenting voices in certain quarters about implementation of the
Goods and Services Tax (GST) as well as demonetisation. In its annual
report 'Doing Business 2018: Reforming to Create Jobs', the World
Bank said that India's ranking reflects nearly half of the 37
reforms, adopted since 2003, implemented in the last four years. The
ranking, however, does not take into account business environment
post implementation of GST, which weaved the country of 1.3 billion
into one market with one tax and removed inter-state barriers for
trade. India, which was ranked 130th among the 190 nations, is "one
of the top 10 improvers in this year's assessment, having implemented
reforms in 8 out of 10 'doing business' indicators," it said.
This is the first time India has broken into top 100 nations. India
is the only large country this year to have achieved such a
significant shift. The parameters that witnessed improvement in
2016-17 were India making it faster for start business, reduction in
procedures and time required to obtain building permit, easier access
to credit, protecting minority investors, ease of paying taxes,
trading across borders, enforcing contracts and making resolving
insolvency easier, the World Bank said. But it still lags in areas
such as starting a business, enforcing contracts and dealing with
construction permits.
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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.
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India was ranked 130th for last two years. In 2014, it managed to get
142nd spot. According to the World Bank, New Zealand is the easiest
place on the planet to do business, followed by Singapore, Denmark,
South Korea and Hong Kong. The US and the UK are ranked 6th and 7th
on the list.
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Among BRICS countries, Russia tops the list with 35th position,
followed by China which has retained its ranking at the 78th place
for the second consecutive year. The biggest surprise of this year,
the authors of the report said, is India, which jumped 30 spots in
one year by improving its score by 4.71 to 60.76 points.
India's
Record jump
Santiago
Croci Downes, Acting Manager, Doing Business Unit at World Bank, said
that in the 15 years' history of this annual report, there have been
only five countries like Georgia and Rwanda which made a massive jump
in one year. But none of them were as big an economy as India. Noting
that India made a very big effort in the past two years, the World
Bank said the results now reflect those initiatives. "This is a
continuous effort of two or three years. But there's still a long way
to go," she said. India used to be in the bottom quarter of the
distribution, now it's in the middle which is a big improvement. "It
(India) is still a place where there is room for improvement in
making the life of entrepreneurs, less bureaucratic, making
transactions simpler and more efficient and less costly. So, there's
still significant room for improvement. But it was a very significant
change and even not just in relative but also in absolute terms,"
she said. For entrepreneurs in India, doing business is simpler now,
she argued. Referring to the series of reforms being carried out by
India, Downs said there is a willingness to improve the private
sector and prioritise these. "If you're asking me would India be
50 next year, I would say that's very very unlikely. But if you could
tell me you would be 50 in five years, I will say may be," she
said. There are a few areas where there is much room for improvement
such as enforcing contracts, which on an average in India is 1,445
days, besides the court system in India is very slow, she said.
"That's one of the areas where India really lags behind compared
to other countries," she said, adding that easing property
registration and property transactions is another area where things
are not very efficient.
Major Jump, Still needs improvement
This
is a major major jump. Climb of 30 places is the result of series
of reforms undertake by the Modi government since 2014. The GST,
which was implemented from July 1, GST reforms have not been counted
this year. It would come into play for the report next year.
Demonetisation was also not covered. India has improved a lot (this
year), but there's still room for improvement, So, I wouldn't
necessarily classify it as a nice place to do business yet, but
definitely is in the right direction to become a nice place. It is
much easier than it was two years ago.
- Rita
Ramalho, Acting Director for World Bank's Global Indicators Group.
