The World Bank’s latest Ease of Doing Business index has not brought any cheer to India as the country finds itself in the same position that it was in last year. India has managed to move just one notch up to 130 from 131 among 190 countries in the Doing Business 2017 report, though the report has praised various reform measures undertaken by the government. Of the 10 parameters that were used to make the index, India’s rank has worsened in five and remained unchanged in three. The country has gained in tax payment rules and trade procedures, remained static on property registration and continues to score poorly on matters like resolving insolvency and reforming labour laws. In contract enforcement, there is slight improvement but the position is near the bottom at 172. The most remarkable improvement has come in securing power connections where its
rank is now 26th after jumping 25 places.
There may be reasons and explanations for the sluggish progress. A large economy with entrenched slow processes in official and other areas may need time to gain dynamism. This year’s index takes into consideration reforms which were effected only till June 2016. The Goods and Services Tax Bill was passed after that and the insolvency and bankruptcy code has not been fully implemented. They will make an impact on business environment only when they come into force. The World Bank index is based on the procedures in Delhi and Mumbai. It is claimed that the ranking would have been better if the index had also focused on reforms undertaken in many states and smaller cities. There is a view that an index which covers both developed and developing countries may not a give fair picture of relative positions. It is also argued that India is a better investment destination than say Kazakhstan, whose rank is 35, and many other countries with a better ranking. This is poor consolation.
The government has said that the report is disappointing. Prime Minister Narendra Modi had set a target of moving up to the top 50 bracket in the index by 2018. This seems to be very unrealistic and the pace of progress has been too slow for that. India is not among the 10 countries, which include Pakistan, that have made the fastest progress since last year in the rankings. The prime minister has told top bureaucrats to identify areas where improvements can be made. Changes have to take place on the ground and in attitudes, along with improvements in laws, processes and procedures. India has a long and difficult way to go before achieving a good ranking in the index.
rank is now 26th after jumping 25 places.
There may be reasons and explanations for the sluggish progress. A large economy with entrenched slow processes in official and other areas may need time to gain dynamism. This year’s index takes into consideration reforms which were effected only till June 2016. The Goods and Services Tax Bill was passed after that and the insolvency and bankruptcy code has not been fully implemented. They will make an impact on business environment only when they come into force. The World Bank index is based on the procedures in Delhi and Mumbai. It is claimed that the ranking would have been better if the index had also focused on reforms undertaken in many states and smaller cities. There is a view that an index which covers both developed and developing countries may not a give fair picture of relative positions. It is also argued that India is a better investment destination than say Kazakhstan, whose rank is 35, and many other countries with a better ranking. This is poor consolation.
The government has said that the report is disappointing. Prime Minister Narendra Modi had set a target of moving up to the top 50 bracket in the index by 2018. This seems to be very unrealistic and the pace of progress has been too slow for that. India is not among the 10 countries, which include Pakistan, that have made the fastest progress since last year in the rankings. The prime minister has told top bureaucrats to identify areas where improvements can be made. Changes have to take place on the ground and in attitudes, along with improvements in laws, processes and procedures. India has a long and difficult way to go before achieving a good ranking in the index.