Riding on government’s major economic reforms like demonetisation and Insolvency and Bankruptcy Code, India jumped to rank 100th in the 2018 edition of the World Bank's 'Ease of Doing Business' index.
The ranking comes as a shot in the arm for the Narendra Modi government amid dissenting voices in certain quarters about implementation of the Goods and Services Tax (GST) as well as demonetisation.
India, which was ranked 142nd when the Narendra Modi government took office in 2014 and 130th last year, is the only large country this year to have achieved such a significant shift on the back of reforms in taxation, construction permits, investor protection and bankruptcy resolution.
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The World Bank said it is "one of the top 10 improvers in this year's assessment, having implemented reforms in 8 out of 10 'doing business' indicators." This is the first time India has broken into top 100 nations.
Reacting to the development, Prime Minister Narendra Modi said the government is determined to further improve the rankings and scale greater economic growth with the mantra of 'reform, perform and transform'.
He hailed as "historic" the jump in India's ranking in 'ease of doing business' and said it was a result of "all-round & multi-sectoral reform push".
Addressing the media in New Delhi, Finance Minister Arun Jaitley said, "This is the highest jump that we have made in doing business ranking and it is significant for India because for the last 3-4 years we are trying to improve upon all the 10 parameters (of ranking) so that it becomes easy to do business in India."
In its annual report 'Doing Business 2018: Reforming to Create Jobs', the World Bank said that India's ranking reflects nearly half of the 37 reforms, adopted since 2003, implemented in the last four years.
With June as cut-off for assessing business environment, the ranking does not take into account the landmark reform of Goods and Services Tax (GST), which from July 1 weaved the country of 1.3 billion into one market with one tax and removed inter-state barriers for trade. Also, demonetisation has not been covered in the report.
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The ranking comes as a shot in the arm for the government that has been battling dissenting voices against the way GST was implemented and growth being hit, although temporarily, due to demonetisation of higher denomination currency.
"In 3 years, from 142 we have come to 100. And I think in those areas where we are still lagging behind, there is a sufficient amount of work in progress. There is a reason to believe that we have a capacity to further significantly improve our position," Jaitley said.
Modi's target of breaking into top 50, he said, is achievable.
"I believe this is doable and therefore these remaining 3 -4 areas where work has to be done we will be pushing it with all the greater force," he added.
The parameters that witnessed improvement in 2016-17 were India making it faster for start business, reduction in procedures and time required to obtain building permit, easier access to credit, protecting minority investors, ease of paying taxes, trading across borders, enforcing contracts and making resolving insolvency easier, the World Bank said.
But it still lags in areas such as starting a business, enforcing contracts and dealing with construction permits.
It takes 30 days now to register a new business, down from 127 days 15 years ago, but "the number of procedures is still cumbersome for local entrepreneurs who still need to go through 12 procedures", it said.
While India is now ranked 4th in the world on protecting investors (up from 13th last year), its ranking on ease of getting electricity has deteriorated from 26 last year to 29 this year.
Credit availability ranking has improved to 29 from 44 and ease of paying taxes has seen a jump to 119th position from 172nd previously.
"This is a major major jump," Rita Ramalho, Acting Director for World Bank's Global Indicators Group, told PTI in Washington, attributing the climb of 30 places to the series of reforms undertake by the Modi government since 2014.
The GST, which was implemented from July 1, will get reflected only in next year's 'ease of doing business' report.
"GST reforms have not been counted this year. It would come into play for the report next year," Ramalho said, adding that demonetisation was not covered.
India was ranked 130th for last two years.
According to the World Bank, New Zealand is the easiest place on the planet to do business, followed by Singapore, Denmark, South Korea and Hong Kong. The US and the UK are ranked 6th and 7th on the list.
Among BRICS countries, Russia tops the list with 35th position, followed by China which has retained its ranking at the 78th place for the second consecutive year. Brazil's ranking is 125th.
The biggest surprise of this year, the authors of the report said, is India, which jumped 30 spots in one year by improving its score by 4.71 to 60.76 points. Brazil is the only BRICS nation that is behind India.
"India has improved a lot (this year), but there's still room for improvement, So, I wouldn't necessarily classify it as a nice place to do business yet, but definitely is in the right direction to become a nice place. It is much easier than it was two years ago," Ramalho said.
Santiago Croci Downes, Acting Manager, Doing Business Unit at World Bank, said that in the 15 years' history of this annual report, there have been only five countries like Georgia and Rwanda which made a massive jump in one year. But none of them were as big an economy as India.
Jaitley said the government was seriously taking up the 3-4 issues where India was still lagging behind to gain a "20 -30 point improvement in the next 1-2 years."
"Reforms are a continuous process... The 3-4 areas where we haven't been treated very high are all areas where significant amount of work is in progress and once its impact is shown on the ground, I'm sure it will be taken into consideration in next year's ranking," he said.