Celebrate, but press ahead
The doing business report is a shot in the arm for India
I t was a given that India would improve its position in the Doing Business Rankings. In the past few years, the government has focused on reforms in the area of tax, bankruptcy laws, and protecting small investors, and it was only a matter of time before the rankings, put out by the World Bank, acknowledged
ourtake that. Sure enough, India’s ranking in the Doing Business 2018 study is
100, 30 spots higher than its ranking in the previous edition. Indeed, the government was miffed at last year’s ranking just showing an improvement of 1 spot (from 131 to 130).
India has always been a market that investors, domestic and multinational, cannot ignore, irrespective of attendant (and significant) issues of how business is done in the country. The richness of some of the country’s resources, including human resources, and the sheer size of its middle class population are a huge draw for companies. Still, even investors with a longterm perspective can only remain long on a country for so long, which is why it is encouraging that the government has started focusing on making it easier to do business in the country.
A 30-point jump is significant. Equally important is the fact that India’s improvement isn’t just relative but absolute – on a scale that measures how close a country is to the best-in-class score, India’s score rose from 56.05 to 60.76. The symbolism of that is unlikely to be lost in a country as focused on academic excellence as India: 60.76% is first class; 56.05, second class. Indeed, as the World Bank points out, “India is the only large country to have achieved such a significant shift.” The specifics are equally impressive: on eight of the 10 indicators used for the ranking, India improved its score. On 6 of the 10, it improved its ranking (which means that there are two indicators where other countries have shown more improvement than India).
While the report gives enough reason to celebrate, the government must retain the single-minded focus that has seen it improve its position this year. China, for instance, is ranked 78th. India, which needs to create between 12-15 million jobs a year, has to, even as it celebrates its performance, press ahead.