India rises 23 positions, is now 77th in World Bank’s ease of doing business

World Bank Building in Washington, DC | Getty Images

This year’s study has taken into account the implementation of GST, which the World bank ignored last year.

New Delhi: India has moved up 23 notches to secure the 77th position, from among 190 countries, in the World Bank’s ‘Ease of Doing Business’ ranking.

It is the second straight jump in the rankings for the country. Last year, India had moved up 30 notches to secure the 100th position.

This year’s study has taken into account the implementation of the goods and services tax (GST), which, sources said, the World Bank did not include in last year’s study as the new tax structure was only launched on 1 July 2017.

Over the course of the year, teething problems arising out of the GST implementation have eased and tax compliance and collections have improved. The government had also brought in the Insolvency & Bankruptcy Code (IBC) to address the non-performing assets in the banking sector.

“Things have improved considerably on the ground and these have now been reflected in the World Bank report,” said Soumya Kanti Ghosh, chief economic adviser to the State Bank of India group. “In fact, our report based on EPFO data also shows that the job scenario is positive and there has been healthy job generation.”

Finance minister Arun Jaitley said: “We have improved tremendously but there are five areas we need to work on.” The areas include time taken for registering a property, starting a business, insolvency and taxation, and enforcement of contract areas.

The Confederation of Indian Industry, meanwhile, said in a statement: “We look forward to the continued momentum of business reforms and to supporting the government in its endeavour to make India among the top investment destinations.”

Last year, govt had pat for tax reforms, rap for construction permits

In last year’s report, the Narendra Modi government had got a pat for reform policies relating to taxation, investor protection and bankruptcy resolution.

The report, however, singled out areas relating to construction permits, registration of properties and enforcement of contracts among others as those that needed improvement.

Improving its ranking on the Ease of Doing Business index has been one of the focus areas for the Narendra Modi government. The country has moved over 60 places under the current government.

India was at the 140th position in the ‘Ease of Doing Business’ ranking when the Modi government took charge in 2014. It improved to 131 in 2015, but policymakers were in for a shock when India climbed up just one position, to 130, in 2016.

The government is now aiming to be among the top 50 countries. “I have always kept ease of doing business as my priority… We are working towards better ranking,” Prime Minister Narendra Modi had said during his two-day visit to Japan this week.

The World Bank’s Ease of Doing Business report is based on 10 indicators of how easy it is to start a business, register property, acquire construction permits, access credit, electricity, resolve insolvency, trading across borders, enforce contracts, protect minority investors besides payment of taxes.