India jumped 30 spots to secure a place among the top-100 countries on World Bank’s ease of doing business rankinglist in 2018. With this year’s performance, India became the first ever country to record highest jump in World Bank’s ease of doing business ranking, said Finance Minister Arun Jaitley during a press conference on Tuesday.
Finance Minister Arun Jaitley who addressed a press conference on Tuesday said, “Historically India has been in the rage of 130-140. In last two years, we made it to 131, 130 places. This year we have jumped 30 points to 100. This is the highest jump any country has made in World Bank’s ease of doing business ranking.”
Commenting on the India’s unprecedented performance in ease of doing business, Prime Minister Narendra Modi stated, “The Government has undertaken an extensive exercise of stakeholder consultations, identification of user needs, government process re-engineering to match government rules and procedures with user expectations and streamline them to create a more conducive business environment. The report acknowledges India as a top improver with the highest jump in rank of any country in Doing Business Report, 2018. India is the only country in South Asia and BRICS economies to feature among most improved economies of the Doing Business Report this year.”
The World Bank’s Ease of Doing Business index ranks the nation based on the 10 indicators. These indicators are: Starting a business, Dealing with construction permits, Getting electricity, Registering property, Getting credit, Protecting minority investors, Paying taxes, Trading across borders, Enforcing contracts and Resolving insolvency. Each one of these indicators carry equal weightage.
The survey conducted by World Bank covers economies of 190 countries, evaluating them on 10 specific parameters required for doing business. India has improved its standing in 6 out of these 10 indicators, the report shows.
India secured 29th spot in terms of getting electricity connection for a business, he added. Meanwhile, the Indian economy has improved its standing to 103 in terms of resolving insolvency. This is one of the most encouraging parameters for India as we were previously ranked 136 in resolving insolvency, but this year we have jumped 33 positions to finish at 103 number, Jaitley said.
“We are ranked 29th in providing credit. This is a significant position we have achieved. The biggest jump we have made is in taxation reforms. This year we have moved up 53 places to 119. In protecting minority shareholders, we are at number 4,” Jaitley said.
Apart from these benchmarks in the Doing Business 2018 report, India has been ranked 164 in Enforcement of Contracts, 181 in Construction Permits, 156 in Starting a Business. Moreover, World Bank listed names of 10 countries which have taken structural reforms, and India is the only major economy to feature in this list. However, Brazil is the only BRICS nation below India in terms of ease of doing business.
With eight reforms making it easier to do business in 2016/17, India was the only economy in South Asia to join the list of the 10 top improvers. India made obtaining a building permit faster by implementing an online Single Window System for the approval of building plans; the new system allows for the submission and approval of building plans prior to requesting the building permit, the report said.
As per the Doing Business 2018, India also streamlined the business incorporation process by introducing the SPICe form (INC-32), which combined the application for the Permanent Account Number (PAN) and the Tax Account Number (TAN) into a single submission. Furthermore, following improvements to the online system in 2016, the time needed to complete the applications for Employee’s Provident Fund Organization (EPFO) and the Employee’s State Insurance Corporation (ESIC) decreased.
The report noted that the joint application for the Mumbai Value Added Tax (VAT) and the Profession Tax (PT) also was fully implemented in January 2017. India also strengthened access to credit by amending the rules on priority of secured creditors outside reorganization proceedings and adopting a new insolvency and bankruptcy code that introduced a reorganization procedure for corporate debtors. In trading across borders, India reduced border compliance time by improving infrastructure at the Nhava Sheva Port in Mumbai.
Export and import border compliance costs were also reduced in both Delhi and Mumbai after merchant overtime fees were abolished. Thanks to the increased use of electronic and mobile platforms, since July 2016 importers under the Authorized Economic Operator (AEO) program have been able to clear cargo faster through simplified customs procedures.
However, Goods and Services Tax, the biggest tax reform in the country, was not factored in by World Bank while conducting this survey. Since June 1 is the cut off date for ranking economies on the basis of 10 specified parameters, GST implementation was not factored in this year. Jailtey mentioned that GST will be factored in the ease of doing business ranking, which will further improve the ranking ahead.
In the World Bank’s ‘Doing Business’ 2017 report, India’s place remained unchanged from last year’s original ranking of 130 among the 190 economies that were assessed on various parameters. The government however was not satisfied with the rankings as, it said, the World Bank did not capture the reforms undertaken by the Centre and states.
Soon after ‘Doing Business 2017’ report, Prime Minister Narendra Modi asked the officials to ramp up the efforts to introduce reforms and push for India’s improved rankings. The Prime Minister is known for making business friendly environment and cutting down the bureaucratic interface by introducing online process.
Source: Business Today