Over the past three and half years, the Government of India has implemented a hostof reforms to make it easier for businesses to start, operate and exit, which were not reflecting in Ease of Doing Business, 2017 rankings.
The report, covering the period from June 2 last year to June 1 this year, India took a giant leap in Word bank's ' Doing Business-2018' ranking from 130 to 100. India ranked top among the South Asian Nations. India's distance to frontier ratio, which tells how similar a country's economic practices has improved in nine out of 10 categories. Also, it is now amongst the top 30 nations in three categories- getting electricity, securing credit and protecting minority investors. However, India lagged in areas such as starting business, enforcing contracts and dealing with construction permits.
However, it is imperative for India to move into the top 50 in the World Bank's Ease of Doing Business ranking in next couple of years. This would require: cutting down as many points of human interface as possible; putting processes online, and; integrating the processes and procedures across different departments.
The global upswing in economic activity is strengthening. Global growth, which in 2016 was the weakest since the global financial crisis at 3.2 percent, is projected to rise to 3.6 percent in 2017 and to 3.7 percent in 2018. The growth forecasts for both 2017 and 2018 are 0.1 percentage point stronger compared with the April 2017 World Economic Outlook (WEO) forecast.
The latest Index of Industrial Production (lIP) in India has come down to 3.8% in September, 2017 vis-a-vis 5% in September, 2016 and 4.5% in August, 2017 owing to poor showing by manufacturing sector coupled with decline in consumer durables output. lIP grew a meagre 2.5% for April-September, 2017 in comparison to 5.8% last year for similar period.
Nonetheless, Indian Economic growth is projected to remain strong and may remain the fastest- growing G20 economy. The increase in public wages and pensions will support consumption. Private investment will recover gradually as excess capacity diminishes, and the Goods and Services Tax and other measures to improve the ease of doing business are being implemented. However, large non-performing loans and high leverage of some companies are holding back investment. r
Monetary policy is projected to remain tight as inflation expectations have still not fully adjusted down. The need to reduce the relatively high public-debt-to-GDP ratio leaves little room for fiscal stimulus.
Trade openness has increased, partly driven by a competitive service sector. Manufacturing has lagged behind, with limited contribution to exports and job creation, leaving many workers in low-paid jobs. Promoting quality job creation in manufacturing would require reducing further restrictions on FDI and trade, modernizing labour regulations and providing better education and skills. Better infrastructure, transport and logistic services would facilitate manufacturing firms' access to global markets, particularly from remote and poorer regions.
We have virtually completed four months of GST and the feedback that we received in the Chamber is that the large units have been able to adjust themselves but the smaller tax payers are finding extremely expensive and difficult. GST council has come up with reduced tax structure for 171 items from 28% to 18% or lower, which is a welcome move and certainly draw applause from the industry.
I would like to mention that ASSOCHAM continues to hold high profile events regularly which are extremely informative and useful for the stakeholders.