India jumps 23 places in World Bank rankings

India jumped 23 places to 77 in theWorld Bank’s ease of doing business global rankings for 2019, becoming the top-ranked country in South Asia for the first time. The country has moved 53 places up the rankings in the last two years.

The World Bank on Wednesday released its ‘Doing Business 2019: Training for Reform’ report, which ranked economies on their ease of doing business, from 1 to 190. A higher ranking means the regulatory environment is more conducive to the starting and operation of a local firm.

While India’s overall ranking improved significantly, it took a beating in two categories where the government’s landmark reforms were expected to lead to better results. In 'Paying Taxes', the country slipped two notches to 121, despite the implementation of the goods and services tax regime.

The World Bank praised India for merging taxes and revising the tax code, but it didn’t result in a higher ranking in the category. Also, the Insolvency and Bankruptcy Code (IBC) coming into effect could not save India from falling five positions to 108 in the 'Resolving Insolvency' category. Estimates by the Department of Industrial Policy and Promotion (DIPP) suggest that claimants working through the IBC have realised almost 59 per cent of the claims. However, a recent report by Debtwire Asia pointed out that on average, it took 275 days to approve a resolution plan from the time the corporate debtor was admitted under the Corporate Insolvency Resolution Process. The government’s estimate is 233 days.

Finance Minister Arun Jaitley said the BJP-led government had reduced red tape and corruption, and its reforms ensured that India jumped from 142 to the 77th rank in four years. He said India could crack the top 50, as envisioned by Prime Minister Narendra Modi, if it improved on the time taken for registering real estate, starting business, and enforcement of contracts. In the latest report, India has been adjudged the fifth best-performing nation globally in reforming the business environment. The country improved its ranking in six of the 10 sub-categories used by the World Bank to judge the climate of business, the same as last year.

“Delighted at yet another rise in India's ease of doing business rank. We are unwavering in our commitment towards economic reforms, which will ensure an environment that fosters industry, investment and opportunities,” the Prime Minister tweeted.

In 'Trading Across Borders', India jumped 66 places to come in at the 80th position. DIPP officials attributed this to the implementation of a risk management system at ports that waives inspection requirement for 80 per cent of the products. "Also the e-Sanchit mobile app makes e-payment of Customs documents possible as well as a number of major seaports that have been made operational 24x7 have been considered by the World Bank” he added.

However, among categories, the country had the best performance in ‘Dealing with construction permits' where it jumped by a massive 129 places to become the 52nd easiest place to construct a business unit. Improved transparency and streamlined procedures were behind India cleaning up its notoriously corrupt land sector and the financial transactions that come with it.

The latest report by the Washington DC based multilateral agency is based on 128 economies implementing 314 specific business reforms over the past year. This surpassed the previous all-time high of 290 reforms two years ago. India is among 11 major economies for which the World Bank took into account two specific metropolitan areas, Delhi and Mumbai.