India jumped 23 spots to rank 77 out of 190 nations in the World Bank’s Ease of Doing Business index on Wednesday.
The organisation said the National Democratic Alliance-led administration has made starting a business, processing of construction permits and cross-border trade much smoother. India scored 137 in the starting a business category, 52 in dealing with construction permits, 24 in securing access to electricity, 166 in registering property, 22 in getting credit and 7 in protecting minority investors.
India is the highest-ranked country in South Asia. “India, with six reforms, is among the top-ten improvers for the second consecutive year,” the report said. The organisation factored in the implementation of the Goods and Services Tax while forming this year’s index. Djibouti and India are the only economies to have been ranked in the “10 top improvers” list for the second consecutive year.
Union Finance Minister Arun Jaitley said focusing on registering property, starting a business, insolvency, enforcement of contracts and taxation will help India break into the top 50 list. “The department of industrial policy and promotion and has worked on how to up the ranking on each criterion,” Jaitley said. “You have to crack the code and try and improve on the criterion in which we lack.”
India was ranked 80 in easing the process of cross-border trade, 163 in enforcing trade and 108 in resolving insolvency. “In India the establishment of debt recovery tribunals reduced nonperforming loans by 28% and lowered interest rates on larger loans, suggesting that faster processing of debt recovery cases cut the cost of credit,” the report said.
The World Bank added: “India focused on streamlining business processes. Under its National Trade Facilitation Action Plan 2017-2020, India implemented several initiatives that improved the efficiency of cross-border trade, reducing border and documentary compliance time.”
The report lauded India for investing in port equipment, strengthening management and improving electronic document flow. “By implementing the Single Window Clearance System in Delhi and the Online Building Permit Approval System in Mumbai during the second half of 2017, India also continued to streamline and centralize its construction permitting process,” it said.
“Online single window in Delhi and Mumbai has streamlined the processes,” a Department of Industrial Policy and Promotion secretary said. “The procedures have reduced from 37 to 20 in Mumbai and from 24 to 16 in Delhi.”
The study recommended that India focus on curbing inefficient licensing and size restrictions that cause a misallocation of resources, reducing total factor productivity and preventing efficient firms from achieving their optimal scale.
In 2017, India jumped 30 places to be ranked at 100th.
Earlier in the year, critics had pointed out “conceptual flaws” in the World Bank’s index, including measuring the “costs of regulation while ignoring the benefits”.
Meanwhile, World Bank Senior Director Shanta Devarajan refuted United States President Donald Trump’s description of India as a “tariff king”, PTI reported. “India has some tariffs, but by no means it’s not [tariff] king,” he said.
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