India jumps 23 places to rank 77 in World Bank’s ‘ease of doing business’ index
India became South Asia’s top-ranked economy, jumping 23 spots to rank 77 out of 190 countries in the World Bank’s ‘ease of doing business’ index released on Wednesday. Last year, India had moved up 30 places to 100th position, showing an improvement on eight out of 10 indicators for “Doing Business”.
The rankings give a measure of how friendly the regulatory environment of a country is for doing business. In its annual ‘Doing Business’ 2019 report, World Bank said India improved on six of the 10 parameters relating to starting and doing business in a country.
New Zeland has held on to the top spot, while Somalia is the worst place to begin a business. China is one of this year’s top 10 improvers, advancing more than 30 spots to 46th place in the global rankings. Pakistan is placed at 136.
These parameters include ease of starting a business, construction permits, getting electricity, getting credit, paying taxes, trade across borders, enforcing contracts and resolving insolvency.
The improvement in the ranking will come as a shot in the arm for Prime Minister Narendra Modi’s government ahead of the 2019 elections and more so at a time when it is facing flak for rising fuel prices and falling rupee, besides being embroiled in a tiff with the Reserve Bank of India. Last year, Finance Minister Arun Jaitley had said Modi wanted to target the top 50 in the ease of doing business index.
On Tuesday, Commerce Minister Suresh Prabhu hinted that India is likely to move up the rankings. In 2016, 2015 and 2014, India had not improved much and was placed at 130th, 131st and 134th positions respectively. Last year’s improvement, the World Bank said, came on the back of “sustained business reforms” over the previous four years.
“This year’s top 10 improvers, based on reforms undertaken, are Afghanistan, Djibouti, China, Azerbaijan, India, Togo, Kenya, Côte d’Ivoire, Turkey and Rwanda. With six reforms each, Djibouti and India are in the top 10 for a second consecutive year. Afghanistan and Turkey, top improvers for the first time, implemented record single-year reforms, with five and seven, respectively,” a World Bank statement said.
The rank has improved by 129 points with regards to ‘construction permits’, 66 points in ‘trading across borders’, 19 in ‘starting a business’, and 7 points in ‘getting credit’.
“India also replaced the value-added tax with the GST (Goods and Services Tax) for which the registration process is faster,” the World Bank said, adding that the government also made paying taxes less costly by reducing the corporate income tax rate and the employees’ provident funds scheme rate paid by the employer.
Stating that a well-designed insolvency framework was a vital determinant of debt recovery, it said the establishment of debt recovery tribunals “reduced non-performing loans by 28 per cent and lowered interest rates on larger loans”.
Further, India reduced the time and cost of export and import through various initiatives, including the implementation of electronic sealing of containers, the upgrading of port infrastructure and allowing electronic submission of supporting documents with digital signatures, it said.
World Bank said India has further streamlined the process of obtaining a building permit and made it faster and less expensive to obtain a construction permit. It also improved building quality control by introducing decennial liability and insurance.
Reacting to the development, PM Modi said the government was committed to economic reforms to ensure an environment that fosters investments. “Delighted at yet another rise in India’s ‘Ease of Doing Business’ rank. We are unwavering in our commitment towards economic reforms, which will ensure an environment that fosters industry, investment and opportunities,” the PM tweeted.
Source: INDIAN EXPRESS