India took a huge stride in improving its ease of doing business, climbing 14 notches to clinch 63rd place in the list of 190 countries, according to the World Bank’s Doing Business Report, (DBR) 2020 released Thursday.
India also remained among the world’s top 10 improvers for the third consecutive year. China too made it to the list.
India’s ranking has improved 79 places in the past six years from 142 in 2014.
“India strengthened access to credit by amending its insolvency law. Secured creditors are now given absolute priority over other claims within insolvency proceedings. India also made paying taxes less costly by reducing the corporate income tax rate and the employees’ provident funds scheme rate paid by the employer,” the report said.
The World Bank also commended India for reducing the time and cost to export and import through various initiatives, including the implementation of electronic sealing of containers.
On labour market regulations, Mumbai changed regulations pertaining to weekly holiday work, overtime hours and paid annual leave.
The report said India made starting a business easier by fully integrating multiple application forms into a general incorporation form. India also replaced the value added tax with the GST for which the registration process is faster. It noted that India streamlined the process of obtaining a building permit and made it faster and less expensive to obtain a construction permit.
The World Bank report, which is based largely on indicators from Delhi and Mumbai, said Delhi Electricity Regulatory Commission reduced charges for low voltage connections. At the same time, Mumbai abolished the practice of site inspections for registering companies under the Shops and Establishments Act.
“Getting electricity was also made easier in Delhi through a reduction in the time for the utility to carry out the external connection works,” it said.
Overall, the BRIC economies—Brazil, Russia, India and China—improved their average ease of doing business score by a combined total of almost 19 points across various areas of business regulation, the report said.
All four economies improved in the area of getting electricity and passed reforms simplifying the process of trading across borders.
However, Reserve Bank of India Governor Raghuram Rajan had recently suggested that India should focus less on World Bank ranking, which is based on a few select indicators only on Delhi and Mumbai and do more on reforms to jump-start job creation.
“Instead of focusing on World Bank indicators of “Doing Business”, which are primarily based on a few selected indicators in Delhi and Mumbai, we must lighten the actual compliance burden for business, while ensuring development is sustainable," Rajan had said in a write-up earlier this year.