For the first time in its history, India has moved into the top 100 rankings of the World Bank’s Ease of Doing Business global rankings thanks to a series of sustained business reforms over the past several years and has placed itself at the 77th spot. Commenting on this jump in ranks, Annette Dixon, Vice President of the World Bank, South Asia region stated that, “Having embarked on a strong reform agenda to improve the business environment, the significant jump this year is a result of the Indian government’s consistent efforts over the past few years. It indicates India’s endeavour to further strengthen its position as a preferred place to do business globally,”
This year, the independent evaluation group covered the two most important cities in India, namely Delhi and Mumbai, and employed as a basis for this ranking, a set of eight indicators for Ease of Doing Business which are the following: starting a business, dealing with construction permits, obtaining credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. A series of reforms in relation to the aforementioned indicators is the reason for this giant leap up the scale. These indicators are not the same for each year’s rankings, but the pattern put in place by the evaluation group indicates its focus for rewarding less burdensome business regulations.
Commenting on the requirements for India’s moving up the rankings, Junaid Ahmad, Country Director, World Bank India, said that “Tackling these challenging reforms will be key to India sustaining the momentum towards a higher ranking. To secure changes in the remaining areas will require not just new laws and online systems but deepening the ongoing investment in the capacity of states and their institutions to implement change and transform the framework of incentives and regulation facing the private sector.”
In regards to the aforementioned indicators, India implemented the following changes in 2016/17:
- 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).
- Dealing with construction permits: A reduction in the number of procedures and time required by implementing an online system for such permits at New Delhi and Mumbai.
- Obtaining credit: Amendment to the rules on the priority of secured creditors outside reorganization proceedings and by adopting a new law on insolvency.
- Protecting minority investors: A increase in the remedies available in cases of prejudicial transactions between interested parties.
- Paying taxes: In both Delhi and Mumbai, paying taxes was made easier via digitalization and other administrative measures.
- Trading across borders: In Mumbai, a reduction in the time taken to comply with import regulations at Nhava Sheva port has made it much quicker to trade across borders.
- Enforcing contracts: The introduction of the National Judicial Data Grid has made it possible to generate case management reports on local courts, thereby making it easier to enforce contracts.
- Resolving insolvency: A new insolvency and bankruptcy code that introduced a reorganization procedure for corporate debtors and facilitated a continuation of the debtor’s business during insolvency proceedings.