Boost for Modi: India leaps 30 places to 100th spot in Ease of Doing Business Rankings
In a big boost to the government's economic policy, India jumped 30 spots to No. 100 in the latest Ease of Doing Business report for 2018 released by the World Bank on Tuesday. "India carried out eight reforms, the highest number for the country in a single year,” said the World Bank report.
India’s score went from 56.05 in Doing Business 2017 to 60.76 in Doing Business 2018.
"We were ranked 142 in 2014, and 130 last year in ease of doing business World Bank list. The World Bank report says India has been undertaking numerous reforms," Finance minister Arun Jaitley said in a conference with a presentation on the World Bank Ease of Doing report.
The report ranks New Zealand, Singapore and Denmark as the most suitable countries for doing business in the world. China ranks at 78, and stands 22 spots above India.
India's improvement in Doing Business rankings comes at a time when Prime Minister Narendra Modi is facing criticism for slowing the economy down by introducing demonetisation and the Goods and Services Tax (GST) over the past one year.
India's economy grew by 5.7% in the first quarter of current fiscal forcing the government into defensive as two states- Gujarat and Himachal- go to elections this year.
After the report was released, PM Modi tweeted from his handle:
The report acknowledges India as a top improver with the highest jump in rank of any country in DB Report, 2018. India is the only country in South Asia and BRICS economies to feature among most improved economies of the DB Report this year.— PMO India (@PMOIndia) October 31, 2017
The World Bank’s Doing Business rankings are based on assessment of 190 economies on ten parameters — starting new business, dealing with construction permits, getting electricity, getting credit, protecting minority investors, paying taxes among others.
Of all the criteria that World Bank assesses countries on, India made the biggest leap in the segment of 'paying taxes'. It was ranked 172 in the previous year whereas the latest ranking for India stand at 119. Despite all the problems that the Goods and Services Tax has introduced for the small traders in India, the World Bank believes that making the whole tax filing system online has contributed to making doing business in India easy.
Here is what the World Bank had to say about India:
Starting a business: India made starting a business faster by merging the applications for the Permanent Account Number (PAN) and the Tax Account Number (TAN) and by improving the online application system. Mumbai also made starting a business faster by merging the applications for value added tax and the Profession Tax (PT).
· Dealing with construction permits: India reduced the number of procedures and time required to obtain a building permit by implementing an online system that has streamlined the process at the Municipality of New Delhi and Municipality of Greater Mumbai.
· Getting credit: India strengthened access to credit by amending the rules on priority of secured creditors outside reorganization proceedings and by adopting a new law on insolvency that provides a time limit and clear grounds for relief to the automatic stay for secured creditors during reorganization procedures. This reform impacts the data for both Mumbai and Delhi.
· Protecting minority investors: Protections for minority investors were strengthened by increasing the remedies available in cases of prejudicial transactions between interested parties. This reform applies to both Delhi and Mumbai.
· Paying taxes: In both Delhi and Mumbai, paying taxes was made easier by requiring payments to the Employees Provident Fund to be made electronically, and introducing administrative measures that make it easier to comply with corporate income tax regulations.
· Trading across borders: In Mumbai, reducing the time taken to comply with import regulations at Nhava Sheva port made it much quicker to trade across borders. In Delhi and Mumbai, the elimination of merchant overtime fees and the increased use of electronic and mobile platforms reduced the time taken to comply with both export and import regulations.
· Enforcing contracts: In both Delhi and Mumbai, the introduction of the National Judicial Data Grid made it possible to generate case management reports on local courts, thereby making it easier to enforce contracts.
· Resolving insolvency: India made resolving insolvency easier by adopting a new insolvency and bankruptcy code that introduced a reorganisation procedure for corporate debtors and facilitated continuation of the debtor’s business during insolvency proceedings. This reform applies to both Delhi and Mumbai.