India jumped 23 places to come in at the 77th spot in the World Bank's latest ease-of-doing-business global rankings in 2018, a year after it had jumped 30 places.
The World Bank’s ‘Doing Business 2019: Training for Reform’ report, released on Wednesday, showed India's rank in ease of doing business jump up from the 100th place among 190 countries. India had broken into the club of 100 nations easiest to conduct business in last year when it managed to jump 30 places from the 130th position.
The latest rankings could become a major poll plank for the ruling Bhartiya Janata Party in the upcoming national elections, as the World Bank has named India as 'one of the economies with the most notable improvement' for the third year in a row.
India has been adjudged the fifth-best performing nation in reforming the business environment. The country improved its rankings in six of the 10 sub-categories used by the World Bank to judge business climate. It had delivered a similar performance last year.
Interestingly, India's ranking actually took a beating in two categories where landmark government reforms were expected to lead to better results. In 'Paying Taxes', India actually saw its rank slip two notches to 121, despite the implementation of the Goods and Services Tax. The World Bank praised India for merging taxes and significantly revising the tax code, but it didn't lead to a better ranking.
The implementation of the Insolvency and Bankruptcy Code (IBC) could not save India from shedding five positions in 'Resolving insolvency', to 108. Estimates by the Department of Industrial Policy and Promotion (DIPP) suggest that creditors working through the IBC have realised almost 59 per cent of claims.
However, a recent report by Debtwire Asia has pointed out that on average, it took 275 days to approve a resolution plan from the time the corporate debtor was admitted under the Corporate Insolvency Resolution Process of the IBC. The government’s estimate is 233 days.
Major jump in ease of foreign trade, construction permits
However, in 'Trading across borders', India surged 66 places to come in at the 80th spot. DIPP Officials attributed this to the implementation of a risk management system at ports that waives inspection requirement for 80 per cent of products. "Also, the E-Sanchit mobile app makes e-payment of customs documents possible as well, as a number of major seaports that have been made operational 24x7 have been considered by the World Bank" he added.
Among categories, the country had the best performance in 'Dealing with Construction Permits' where it jumped by a massive 129 places to become the 52nd easiest place to construct a business unit. Improved transparency and streamlined procedures were behind India cleaning up its notoriously corrupt land sector and the financial transactions that come with it.
The report, covering all policy reforms undertaken by the government till May 1 of this year, ranked India top among the South Asian nations. There was an improvement in the country's 'ease of doing business score', which indicates the extent to which a country's regulatory practices are in sync with global best practices.
India also remained among the top-30 nations in the same three categories as last year — getting electricity, securing credit and protecting minority investors. However, the World Bank noted that the country needed to do more in areas such as enforcing contracts, registering property and the most fundamental of them all -- ease of starting a business.
The latest report by the Washington DC-based multilateral agency encompasses 128 economies, implementing 314 specific business reforms over the past year. This surpassed the previous all-time high of 290 reforms two years ago.
India is among 11 major economies for which the World Bank took into account two specific metropolitan areas, in this case, Delhi and Mumbai.
|Ease of Doing Business: Where India stands now|
|Doing Business 2018 Report (2017)*||Doing Business 2019 Report (2018)*||Movement in Rank|
|India's Country Rank (Out of 190)||100||77||23|
|Dealing with construction permits||181||52||129|
|Trading Across Borders||146||80||66|
|Starting a business||156||137||19|
|Protecting Minority Investors||4||7||-3|
|Note: *Year in bracket represents the year report was launched; Green represents the best development in rank; Red represents the worst development in rank; Source: World Bank Doing Business 2019 Report|
|India secures highest rank in in South Asia...||... But not in the BRICS grouping|
|Doing Business 2019 Report (2018)*||Doing Business 2019 Report (2018)*|
|Note: Green represents best performing economy; Red represents worst performing economy; Source: Doing Business 2019 Report||Note: Green represents best performing economy; Red represents worst performing economy; Source: Doing Business 2019 Report|