There’s some good news coming in for the Narendra Modi government: India has managed to pull off quite an impressive show by moving to the 100th position in the World Bank’s Doing Business 2018 index. Last year, it stood 130th.
This comes as a big relief to the government, which has come under fire lately for multiple economic disruptions, including demonetisation in November 2016 and the shoddy implementation of the new goods and services tax (GST) regime since July 2017.
The prime minister, quite obviously, is elated, especially considering his government’s obsession with improving India’s standing on the index for the last few years.
It has never been easier to do business in India. India welcomes the world to explore economic opportunities our nation has to offer!
— Narendra Modi (@narendramodi) October 31, 2017
The World Bank rolled out the Doing Business report in 2002, and it currently ranks 190 countries to identify the most business-friendly nations on the basis of 10 parameters. This year, India managed to improve its ranking in six out of these 10 criteria.
|Starting a business||155||156|
|Dealing with construction permits||185||181|
|Protecting minority investors||13||4|
|Trading across borders||143||146|
The adoption of an insolvency and bankruptcy code, making compliance with corporate income tax laws easier, and extended paid maternity leave have together helped improve India’s ranking. In all, the country has adopted 37 reforms since 2003 and nearly half of these came in the last four years, the report said.
However, it still lags in areas such as starting a business, enforcing contracts, and construction permits. “Tackling these challenging reforms will be key to India sustaining the momentum towards a higher ranking,” said Junaid Ahmad, the country director for India at the World Bank. “India’s focus on doing business at the state level may well be the platform that sustains the country’s reform trajectory for the future.”
This year, India is among the top 10 countries to significantly improve their rankings. But Asia’s third-largest economy is still far from achieving its ambitious target of breaking into the top 30 countries by 2020. The introduction of the GST, which was not taken into account this year, is expected to boost India’s position next year.