India jumped into 100th place on the World Bank’s ranking of countries by Ease of Doing Business for the first time in its report for 2018, up about 30 places, driven by reforms in access to credit, power supplies and protection of minority investors.
The report, based on data from the capital New Delhi and the financial hub of Mumbai, ranked India among the top 10 “improvers” globally, having done better in eight out of 10 business indicators.
“Today’s result is a very clear signal from India to the rest of the world that not only has the country been ready and open for business, as it has been for many decades, it is now competing as the preferred place to do business globally,” Annette Dixon, World Bank’s vice president for South Asia, told reporters in New Delhi.
“Starting a business is now faster,” Dixon said, adding that India had strengthened access to credit system and made it easier to secure to procure construction permits.
However, the agency noted that India lags in areas such as “starting a business”, “enforcing contracts” and “dealing with construction permits.”
The report excluded the impact of Prime Minister Narendra Modi’s shock withdrawal of high-value banknotes last year and the implementation of a nationwide multi-rate goods and services tax (GST), steps that affected businesses and dragged the economy to a three-year-low in the April-June quarter.
“In the case of GST, we know that this is a very complicated reform,” Dixon said, adding that the agency would observe the GST for the next two or three years to see its full implementation.
This month Modi eased tax rules for small and medium-sized companies in a bid to address growing criticism of his stewardship of Asia’s third-largest economy.
The World Bank report, covering the period from June 2 last year to June 1 this year, ranked India top among the South Asian nations.
“This year’s remarkable results are the culmination of efforts that have taken place over the past three years, so you can extrapolate forward and see that steps that are taken this year may take 2-3 years to show up in the results,” Dixon said.