Published: Thu, November 01, 2018
Markets | By Otis Pena

India Jumps 23 Places On World Bank’s Ease Of Doing Business Index

India Jumps 23 Places On World Bank’s Ease Of Doing Business Index

Long known for its bureaucracy, India has made major strides in improving prospects for businesses in the country, the World Bank said in a report on Wednesday.

India jumped 23 positions in the World Bank's Ease of Doing Business Index and is now ranked 77 out of 190 countries in 2018, a development that could help the country attract more foreign investments.

Briefing reporters in New Delhi, Finance Minister Arun Jaitley said, Prime Minister Narendra Modi had set the aim of reaching top 50 of the rankings and we have improved steadily from 142 to 77 in the last 4 years.

According to the doing business report 2018, the improvement has been attributed to efforts by the government to make registration of property easier by introducing an online system to pay fees and obtain digital certificates.

"The most dramatic improvements have been registered in the indicators related to "construction permits" and "trading across borders".

India's centrally planned economy in the years after independence was renowned for the complex system of permits required to run a business in the country.

India was ranked at the 142nd position among 190 nations when the Modi government came to power in 2014. "We are unwavering in our commitment towards economic reforms, which will ensure an environment that fosters industry, investment and opportunities", the prime minister tweeted. As a result, the country significantly improved its global ranking in this area to 53, from 82 past year.

India is the only other country, alongside Djibouti, to be in top ten for second year in a row. China has moved up from its previous rank of 78 to 46th place.

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India has improved its rank in 6 out of 10 indicators and has moved closer to worldwide best practices (Distance to Frontier score) on 7 out of the 10 indicators.

This is the second consecutive year that India has been recognised as a top improver. Neighbouring Pakistan is placed at 136.

Jaitley pointed out that the areas where India needs to improve include insolvency and taxation and the time taken to register property, start a business and enforce contracts.

While there has been substantial progress, India still lags in areas such as Enforcing Contracts (ranked 163 globally) and Registering Property (166). "The structural reforms which have not yet captured fully will be reflected", he said.

With streamlining of processes, India made it faster and less expensive to obtain a construction permit.

The World Bank observed that India has made paying taxes easier by replacing many indirect taxes with a single GST for the entire country backed by the fact that the number of payments per year has gone down to 11.9 from 13, and total tax and contribution rate - as a percentage of profit - has been reduced to 52.1 per cent from 55.3 per cent.

He said, Department of Industrial Policy and Promotion, DIPP has worked on how to up the ranking on each criteria.

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