Mumbai: The Indian economy’s 30-rank leap to break into the top 100 countries on the World Bank’s ‘ease of doing business’ list, has finally brought respite to the Narendra Modi-led government, from the barrage of criticism over the slowing growth.
Finance Minister Arun Jaitley on Tuesday said that "this is the highest jump any country has made in the doing business rankings."
Sure enough, this ranking harbours good news for an economy and a government battling three-year low GDP numbers, a precarious trend in inflation, teething problems of a tax reform, an uptick in fiscal deficit target and among other things, endless fault-finding from the Opposition.
So what is it that helped India climb up the ladder despite such worrying economic indicators?
According to the World Bank report, the parameters that witnessed improvement in 2016-17 were – faster to start business, reduction in procedures and time involved in obtaining a building permit, easier access to credit, protecting minority investors, ease of paying taxes, trading across borders, enforcing contracts and easier resolution of insolvency. In the ‘Distance to Frontier Metric’ section, India’s score went up from 56.05 in Doing business in 2017 to 60.76 in Doing business in 2018.
Speaking on the development, Prime Minister Narendra Modi tweeted: "Historic jump in 'Ease of Doing Business' rankings is the outcome of the all-round & multi-sectoral reform push of Team India."
Indeed, it was the slew of 37 “multi-sectoral” reforms, that finally got implemented in the last four years and gave India the “push” it needed. Let’s take a look at some of these:
Obtaining a construction permit
Until 2016, it reportedly took 164 days in Mumbai and 213 in Delhi to get a construction permit. The whole procedure was also not digital. Government officials in July said that the process for granting permits had been eased and now it takes only 60 days to get a construction permit in Delhi and Mumbai.
Starting a business
India had ranked 155 among 190 countries last year on this parameter. In June, the government informed the World Bank that processes involved in starting a business had been reduced from 14 to five. Obtaining DIN, PAN and TAN have been merged, employee provident fund has been moved online, bank accounts are not required mandatorily for any forms – this way many processes have been eased.
Insolvency resolution process
The introduction of the Insolvency and Bankruptcy Code, 2016 had not been taken into consideration last year as it was implemented post the last date for compilation of the report. India was ranked 136th on this parameter last year. This law is expected to transform the insolvency resolution process.