Published: Thu, November 01, 2018
Markets | By Erika Turner

India ranks 1st among South Asian countries in Ease of Doing Business

India ranks 1st among South Asian countries in Ease of Doing Business

India carried out six business reforms during the past year, earning the credentials of being a top global improver for a second consecutive year, says the World Bank Group's Doing Business 2019: Training for Reform report, released on Wednesday.

Sustained business reforms over the past several years helped India jump 23 places to move to 77th position in this year's global ease of doing business rankings.

Addressing the media on the back of India's rise in Ease of Doing Business, Finance Minister Arun Jaitley lauded Department of Industrial Policy and Promotion (DIPP) for cracking the code by which countries are ranked.

These parameters include ease of starting a business, construction permits, getting electricity, getting credit, paying taxes, trade across borders, enforcing contracts and resolving insolvency.India was ranked at the 142nd position among 190 nations when the Modi government came to power in 2014. It rose to the 100th spot in the last ranking from 131st rank in the previous year. The top five overall are: New Zealand, Singapore, Denmark, Hong Kong and Korea.

The United States is placed 8th and China ranked at 46th. "We are unwavering in our commitment towards economic reforms, which will ensure an environment that fosters industry, investment and opportunities", Prime Minister Narendra Modi tweeted.

The report released Wednesday noted that India is among the top ten economies improving the most across three or more areas measured by the study, alongside countries such as Afghanistan, Djibouti, China, Azerbaijan, Togo, Kenya, Côte d'Ivoire, Turkey and Rwanda.

"What firms actually encounter "on the ground" is perhaps more important, but there are limitations to our ability to measure and interpret those experiences without bias".

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World Bank said India has further streamlined the process of obtaining a building permit and made it faster and less expensive to obtain a construction permit. "In India the establishment of debt recovery tribunals reduced nonperforming loans by 28% and lowered interest rates on larger loans, suggesting that faster processing of debt recovery cases cut the cost of credit", the report said.

The World Bank also acknowledged the country's efforts on improving the sharing of credit information after it "introduced bureau or registry credit scores as a value added service".

But why does improvement on index matter for "Make in India"?

The country is said to have made starting a business easier by reducing the time needed to obtain a business licence. The latest reform initiatives included electronic submission of documents and upgrading of port infrastructure.

"Doing Business provides a road map that different governments can use to increase business confidence, innovation, and growth and reduce corruption". In grant of construction permits, India's rank improved from 181 in 2017 to 52 in 2018, an improvement of 129 ranks in a single year.

"Getting Electricity and Trading Across Borders also saw reforms in the two cities".

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