World Bank en­dorses NDA govt’s re­form cre­den­tials

In­dia climbs a record 30 places to 100th rank in the World Bank Do­ing Busi­ness sur­vey for 2018

Mint Asia ST - - News - BAY SIT R ANJAN M ISHRA

In­dia’s rank­ing in the World Bank Do­ing Busi­ness sur­vey for 2018 climbed a record 30 notches to 100 as a range of reg­u­la­tory and pol­icy re­forms put in place by the Union and state gov­ern­ments over the past four years started de­liv­er­ing re­sults. Sig­nif­i­cantly, this year’s re­port from the World Bank has been ti­tled Re­form­ing to cre­ate jobs.

Not only does it bur­nish the re­formist cre­den­tials of the Bharatiya Janata Party-led National Demo­cratic Al­liance (NDA), which has un­der­taken tax re­forms, re­duc­ing gov­ern­ment over­sight by step­ping up dis­in­ter­me­di­a­tion and anti-cor­rup­tion poli­cies, it also sig­nals that change in the eco­nomic nar­ra­tive is gain­ing mo­men­tum.

Fi­nance min­is­ter Arun Jait­ley sig­nalled as much while ad­dress­ing a press con­fer­ence on Tues­day. “In­di­rect tax re­form (goods and ser­vices tax) had be­come law by June, but was im­ple­mented from July. We will get credit for it in fu­ture rank­ings,” he said and then added, “Eval­u­a­tion for the ease of do­ing busi­ness rank­ing is very tough. The rank­ing does not re­flect the re­form mea­sures un­less the out­come is vis­i­ble on the ground.”

The NDA, which has been seek­ing an im­prove­ment in In­dia’s rank­ing to at­tract greater for­eign in­vest­ment, has set more am­bi­tious tar­gets for it­self. Ac­cord­ing to an out­put-out­come frame­work doc­u­ment pre­pared by the gov­ern­ment, In­dia is seek­ing to reach the 90th rank in 2017-18 and 30th by 2020. Last year, In­dia’s rank­ing im­proved by just one notch to 130 out of 190 coun­tries.

The Do­ing Busi­ness re­port, which bases the rank­ings on field sur­veys and in­ter­views with cor­po­rate lawyers and com­pany ex­ec­u­tives in Delhi and Mumbai, also rec­og­nized In­dia as one of the top five re­form­ers in this year’s as­sess­ment. In­dia im­proved its rank­ing on six out of the 10 pa­ram­e­ters, be­com­ing the only large econ­omy to do so.

Of the 10 pa­ram­e­ters, In­dia got its high­est rank­ing on “pro­tect­ing mi­nor­ity in­vestors” by ris­ing to the fourth po­si­tion from 13th last year as the coun­try’s cor­po­rate law and se­cu­ri­ties reg­u­la­tions were rec­og­nized to be highly ad­vanced. Its worst per­for­mance came in “deal­ing with con­struc­tion per­mits” de­spite im­prov­ing its rank­ing to 181 from the 185th po­si­tion last year.

Jait­ley said the tar­get of mak­ing it to the top 50 in the rank­ing now seems doable. “In pa­ram­e­ters such as do­ing busi­ness, deal­ing with con­struc­tion per­mits, en­forc­ing con­tracts and reg­is­ter­ing prop­erty where In­dia is still lag­ging be­hind, there is rea­son to be­lieve that we can im­prove our po­si­tion sig­nif­i­cantly,” he added.

Ni­laya Varma, a part­ner at KPMG In­dia, said the next par­a­digm shift to the top 50 is still a long way ahead and will re­quire In­dia to main­tain strong mo­men­tum. “There is a need to con­tinue to work on other ar­eas in­clud­ing start­ing a busi­ness, trad­ing across borders as well as land re­forms,” he said.

On the “dis­tance to fron­tier” met­ric, which mea­sures the ab­so­lute im­prove­ment in the per­for­mance of a coun­try against bet­ter-per­form­ing coun­tries, In­dia scored 60.76 against 56.05 last year, in­di­cat­ing that “the coun­try is con­tin­u­ing its steady shift to­wards best prac­tice in busi­ness reg­u­la­tion”.

Ju­naid Ah­mad, World Bank coun­try di­rec­tor in In­dia, said ef­fec­tive im­ple­men­ta­tion of GST and bank­ruptcy law may im­prove In­dia’s rank­ing sig­nif­i­cantly over the com­ing years.

“It in­di­cates In­dia’s en­deav­our to fur­ther strengthen its po­si­tion as a pre­ferred place to do busi­ness glob­ally,” said An­nette Dixon, the World Bank’s vice-pres­i­dent for the South Asia re­gion.

The World Bank said while there has been sub­stan­tial progress, In­dia still lags in ar­eas such as start­ing a busi­ness (156), en­forc­ing con­tracts (164) and deal­ing with con­struc­tion per­mits (181).

Gireesh Chan­dra Prasad con­trib­uted to this story.

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