The Real Need For Ease of Doing Business

th in 2012 just falling behind 131st ranked West Bank & Gaza (one country). While one leading Indian newspaper described the news as a big vindication of the NDA Government, a Stock Market Analyst called it a blockbuster development which would surely shore up international interest in the country. So what is the World Bank’s ease of doing business index? According to the Bank, economies are ranked on ten topics – 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. A high ease of doing business ranking, the Bank surmises, means the regulatory environment is more conducive to the starting and operation of a local firm. Sort of the Mecca for all investors. When India was rubbing shoulders with war-torn Afghanistan in the bank’s Index List Indian governments dismissed the World Bank’s findings as bunkum. The present government, however, has taken the Bank ranking more seriously and worked to improve on the parameters to get India’s ranking up higher in the list. Is that very difficult? Yes and No. No. Because the Bank’s rank is only based on a survey of business and industry in two Indian cities – Delhi and Mumbai. The Bank claims but many may well doubt how authentic and exhaustive the exercise is. The Bank itself has comprehensive footage of words to justify its thoroughness. There are no surprises in what the Bank is looking for and the government can work on policy and procedural improvement in these two cities to win over the Bank. The second answer is Yes. Because while India can easily scale the Bank Index year on year, the fact remains that the country actually needs to be a place where there is ease of doing business. And that task is difficult but by no means impossible. If we are going to be one of the top economies of the globe and have equitable economic and social development across the country, governments – both at the Centre and in the States – need to work on policy and implementation to ease the present herculean mess of doing business in all parts of the country. And in that sense the 10 areas identified by the World Bank is a good place to start. India today has the manpower, skill and commitment to fast-forward economic growth. What the country has always been waiting for are the right policy makers and administrative action. Perhaps then we will all be doing High-Fives for the right reasons. (Mainak De tweets @mainakde)  ]]>

Modi attacks Congress over 'Ease of Business'

Prime Minister Narendra Modi on Saturday attacked Congress for questioning the World Bank Report on ease of doing business in India and said with GST and other reforms, its report next year would show further improvement in ranking. The Prime Minister said those who had worked with the World Bank previously were now raising doubts over India’s ranking. “Some people do not understand the impact of India’s ranking going up from 142 to 100, they are not bothered by it. After coming up 42 positions from 142, I don’t feel like sleeping,” he said while addressing ‘India’s Business Reforms’ event at the Pravasi Bharatiya Kendra here. Modi also said: “I am a Prime Minister who has never seen the World Bank building even while those who were there (in government) earlier knew the World Bank very well. They are now questioning the World Bank ranking.” Modi said he did not want to “sleep” over the 30 place jump this year – the biggest leap by India ever, and wants to do more. The Prime Minister said India would be at an even better place in 2018 ranking since issues raised by traders, businesses on Goods and Services Tax (GST) have been positively accepted by the government. The ranking took into account reforms initiated only till May-end, he said. It did not reflect the impact of GST, which was implemented from July 1, he added. The GST has not just integrated the nation of 1.2 billion into one market with one tax rate but also provided a stable and transparent taxation regime, he said. “This reform plus others that have already happened but need gestation and stabilisation time before they are taken into account by the World Bank, will improve the ranking. All these combined, gives me confidence that India will occupy a place of pride in World Bank’s report in 2018 and the year thereafter,” Modi said. The Prime Minister said when the government decided to bring GST, people were unsure about its implementation. Three months after the tax reform, the GST Council meeting was organised and issues raised by traders and business communities were addressed, he said. He said the GST Council at its next meeting on November 9-10 will make necessary changes. On the implementation of GST, Modi said GST is the biggest tax reform in the history of India and it was “fulfilling global expectations”. The Prime Minister said that bringing change to the country and its 1.25 billion people was his mission. He said that ease of doing business also leads to ease in life. He said India has moved 19 places up on the logistics performance index. Modi said India has reached a position from where it is easier to improve further. “Our efforts have gathered momentum. The World Bank has recognised the tremendous work done by us to improve the ease of doing business. In the short time of three years, we have moved up 42 ranks. India has delivered with the highest improvement in rank in a year,” Modi said on the economy. Jump in ease of doing business ranking is an example of good governance, Modi said. “Our mantra is ‘reform’, ‘transform’ and ‘perform'”, Modi said. The Prime Minister said the government is improving the investment climate in the country. “More than 90 per cent of FDI approvals have been put on automatic route. FDI inflow has been at all time high. Total FDI has gone up by 67 per cent in the last three years,” said Modi. Emphasising on the importance of technology, he said the use of technology should maximise governance. “Along with technology we also need to change mindsets. The past mindset of excessive control should be replaced with minimum government maximum governance.”

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India in top 100 of 'Ease of Doing Business' ranks

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 “India has moved to 100th rank as a result of a number of reforms by the government. India is moving ahead in absolute ranking as well,” Annette Dixon, Vice President, South Asia region, told reporters earlier in the day. It will be only over a period of 1-3 years that the full impact of GST reform on ease of doing business can be assessed, she added. The report captures reforms implemented in 190 countries between the period June 2, 2016 to June 1, 2017.

Getting into Top 50 within reach: Jaitley

Getting into the top 50 countries is a distinct possibility over the short term, Finance Minister Arun Jaitley said on Tuesday. “We jumped over 30 places in three years, and as Prime Minister Narendra Modi had said about setting a target to get among the top 50… I believe it is eminently doable,” Jaitley told reporters here following the release of World Bank Group’s latest report ‘Doing Business 2018: Reforming to Create Jobs’. “In 2014, we were ranked 142, and in the last two years India has gone from 131 to 130,” he said. “This is the highest jump any country has made in the ease of doing business rankings and is significant for India for our efforts on the 10 rankings’ criteria,” Jaitley said. “These 10 parameters are so tough that you don’t get credit for the reforms introduced till you actually see their results on the ground,” he said, adding that the World Bank’s cut-off date for considering performance is June of every year. Listing the areas which had boosted India’s ranking, Jaitley said that on “protection of minority investors” India had come up to fourth place on account of reforms like bringing in the Companies Act and setting up of the National Company Law Tribunal (NCLT).  The report recognises India as one of the top 10 improvers in this year’s assessment, though the report does not take into account the Goods and Services Tax (GST) rolled out on July 1. “The biggest jump comes in the area of taxation reforms where we were ranked 172 last year and have moved up 53 places to be at 119 this year,” Jaitley said, adding that India can hope to get credit for GST in the rankings for “subsequent years”. “India made paying of taxes easier by requiring that payments are made electronically to the Employees Provident Fund and introducing a set of administrative measures for easing compliance with corporate income tax,” the report said. “India, with eight reforms, was one of this year’s top 10 improvers worldwide and the leading regional performer. This is the first year that India is in the top 100 economies globally,” it added. The Finance Minister noted that both on “ease of getting credit” and “electricity connections” India has come up to the 29th position this year. “On resolving insolvency, we were 136… then we brought in the Bankruptcy Code and now we have climbed 33 places to 103rd position,” he said.
“India has moved to 100th position as a result of a number of reforms by the government. India is moving ahead in absolute ranking as well,” Annette Dixon, Vice President, South Asia region, World Bank, told reporters earlier in the day. “India made paying taxes easier by requiring that payments are made electronically to the Employees Provident Fund and introducing a set of administrative measures easing compliance with corporate income tax,” the report stated. The report noted that India has adopted 37 reforms since 2003 with nearly half of these reforms having been implemented in the last four years. “India, with eight reforms, was one of this year’s top ten improvers worldwide and the leading regional performer. This is the first year that India is in the top 100 economies globally,” it said. “India is the only large country this year to have achieved such a significant shift. India’s score went from 56.05 in doing business to 60.76. This means last year India improved its business regulations in absolute terms – indicating that the country is continuing its steady shift towards best practice in business regulation,” the World Bank said in a statement. Dixon said, “Having embarked on a strong reform agenda to improve the business improvement, 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 indicators on which reforms were implemented in Delhi and Mumbai, the two cities covered by the report are: starting business, dealing with construction permits, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. “India performs well in the areas of protecting minority investors, getting credit and getting electricity. The country’s corporate law and securities regulations have been recognised as highly advanced, placing India in 4th place in the global ranking on protecting minority investors,” it said. 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 Organisation for Economic Co-operation and Development (OECD) high-income economies. While there has been substantial progress, India still lags in areas such as starting a business, enforcing contracts and dealing with construction permits, the report notes. The time taken to enforce a contract is longer at 1,445 days than it was 15 years ago. In starting a business, India has reduced the time needed to register a new business to 30 days now, from 127 days 15 years ago. However, the number of procedures is still cumbersome for local entrepreneurs who still need to go through 12 procedures to start a business in Mumbai. “Tackling these challenging reforms will be the 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,” Junaid Ahmand, Country Director India, World Bank said. Commenting on the World Bank’s report, Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII), said, “The huge improvement in ranking and score will immediately boost investor sentiments. The latest report validates the commitment of the government to fast-tracking economic reforms, addressing red tapism and facilitating business. The surge in ranking by as much as 30 places is an outcome of key reforms including digitisation of processes, enhancing tax payment and access to credit. “It is a matter of great pride that India has been named as among the top ten reforming economies in 2016-17 with as many as eight reform areas out of ten. In fact, India is well on its way to emerge as a global leader in protecting minority interests and is currently ranked 4th in the world.” Banerjee, however, rued that one of the most important reforms — GST — has not been considered in this year’s report owing to cut off date. “CII is confident that on the back of GST and other reforms that are planned, India would see an equally impressive improvement next year. It is not too distant in the future that India would break into the league of top 50 countries,” he added. (IANS) // ]]>