India needs more reforms to be competitive: World Bank President Malpass

David Malpass says corporate tax cut should add to more growth

Reforms in land management and enforcing contracts could be the next big measures through which India can better its Ease of Doing Business ranking, said World Bank President David Malpass on Saturday. In its latest global report, released on Thursday, the World Bank placed India at 163 and 154 positions, respectively, on enforcing contracts and registering property.

Malpass said India needs to provide adequate resources to commercial courts at the district level for judgments to flow faster. “Small claims courts are needed to help people enter into contracts which they know can be enforced,” he said.

“With regard to land management reforms, digitisation of the land data and making the data readily available throughout India would facilitate the buying and selling of land,” Malpass said, addressing the press a day before Diwali.

Earlier in the day, Malpass met Prime Minister Narendra Modi and talked about the importance of data in India’s economy and public policy. Challenges in water conservation, education and skill development were also discussed.

India rose 14 places in the 2019 index, inching closer to its target of being counted as part of the top 50 club. While it is now the 63rd best nation to do business in, up from 77th last year, it still lags countries in Southeast Asia such as Malaysia (12th) and Thailand (21st), as well as China, which moved up to the 31st position.

Prime Minister Narendra Modi with World Bank President David Malpass

But, Malpass said, India was on the right track, being among the 10 best-performing economies for three straight years.

“A country’s competitiveness is partly due to ease of doing business but also due to macro-economic stability, skills of the workforce and whether investors finally chose to invest there,” the World Bank president, said.

Malpass also addressed a NITI Aayog lecture, where he praised measures by the government to ease the bankruptcy process and monitoring of assets. On the health of the domestic financial sector, which has seen banks under pressure from unsustainable levels of non-performing assets, Malpass encouraged the deepening of capital markets, including those for bonds and mortgages.

Also, he pitched for the growth of private banks as well as stricter regulations for non-banking financial companies which he said may entail some risk. World Bank currently has 97 projects with over $24 billion committed in the country and Malpass said existing programs will continue. He added the body’s funding for India may grow by an estimated $5-6 billion annually.

India has breached the 100th mark in the World Bank’s ease of doing business report two years back, jumping 30 places from the 130th position. Last year, it gained 23 places to reach 77th, among a total of 190 countries.

Globally, the ease of opening small businesses has not progressed much, he said. The challenge of boosting growth in developed markets in Europe has also acted as a drag on efforts to raise global growth.