Prime Minister Modi’s dedication is paying off big time. His decisions to ensure doing business easier – most of which do not make news – have been vindicated by the World Bank.
In the World Bank’s Ease of Doing Business 2017 rankings, India jumped from 130 to 100, 30 spots in just one year! This is a huge thumbs-up to Prime Minister Modi’s reforms. India was also recognized as one of the top 10 improvers as it implemented reforms in 8 out of 10 Doing Business indicators. India is the only large country to have achieved such a significant shift. This ranking is expected to further improve drastically as the GST norms settle down in another few months’ time and as people get used to it.
“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,” said Annette Dixon, Vice President, South Asia region.
The 8 indicators in which reforms were implemented in Delhi and Mumbai – the two cities covered by the report – were: starting a business, dealing with construction permits, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Compare this to last year when India was recognized to have implemented reforms in 4 areas – getting electricity, paying taxes, trading across borders and enforcing contracts.
In some crucial where India improved considerably were – resolving insolvency (from rank 136 to 103); protecting minority investors (from 13 to 4); paying taxes (from 172 to 119), and getting credit (from 44 to 29).
The very high ranking on the ‘protecting minority investors’ front is a factor to be proud of. India’s corporate law and securities regulations have been recognized as highly advanced because of which India was placed at the 4th spot.
The time to obtain an electricity connection in Delhi has dropped from 138 days four years ago to 45 days now, almost 20 days less than the 78 days average in OECD high-income economies! India places 29th in the global ranking on Getting Electricity indicator.
“Tackling these challenging reforms will be key to India sustaining the momentum towards a higher ranking,” said Junaid Ahmad, Country Director India. “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. 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.”