Press Trust of India
Washington, Oct 28: India now ranks 130 out of 189 countries in the ease of doing business, moving up 12 places from last year, according to a World Bank report. “A forward movement of 12 spots in the ease of doing business by an economy of the size of India is a ‘remarkable achievement,” World Bank’s Chief Economist and Senior Vice President Kaushik Basu said.
“For any big economy, a rank improvement of 12 is a remarkable achievement. Going from 142 in the world to 130, as India has done, is very good sign. It gives a good signal about the way things are moving in India,” Basu told PTI in an interview as World Bank released its annual report ‘Doing Business 2016’ which is topped by Singapore, followed by New Zealand, Denmark, South Korea, Hong Kong, Britain and the US. China is ranked 84 and Pakistan is at 138th place. Pakistan in fact has slipped 10 spots from 128 last year while China has moved six spots in a year from 90 since the last report. The World Bank said India, which has a global ranking of 130, implemented two reforms during the past year.
For example, in starting a business, India eliminated the requirements for a paid-in minimum capital and a certificate to commence business operations, significantly streamlining the process for starting a business. “What is significant about India is that they are in the middle of what appears to be a very, very ambitious process of reforms affecting a broad range of areas captured by the Doing Business indicators,” Lopez Claros, Director of the Global Indicators Group World Bank, said during a conference call. Observing that the potential to see kind of a rapid economic growth in India is very high, Claros said it has very favourable demographics, and to the extent that some of the bottlenecks that the Doing Business data identified in India are removed, the potential benefits could be quite large.
“And India being India, that is a large economy. This could have also international repercussions in terms of the impact on the global economy,” he said. Claros said there is a great deal of work underway in India to design a policy that will be modest and friendly. “And the improvement that you have seen in India’s Doing Business ranking this year is kind of an early recognition of these efforts, but more is coming,” he added.
In India the establishment of debt recovery tribunals reduced non-performing loans by 28 per cent and lowered interest rates on larger loans, suggesting that faster processing of debt recovery cases cut the cost of credit. Research also shows that a badly designed tax system can be a big deterrent for businesses, it said. In 2010, India established an online system for value added tax registration and replaced the physical stamp previously required with an online version.
It takes 29 days to start a new biz
India might have become a better place for starting a business but it still takes 29 days and over 12 procedures to begin a venture. In terms of starting a business, India’s position has improved to 155 from 164 last year. Besides, the country’s has seen improvement in dealing with construction permits as well as in getting electricity. “Starting a business there requires 12.90 procedures, takes 29 days, costs 13.50 per cent of income per capita and requires paid-in minimum capital of 0 per cent of income per capita,” as per data collected for the report. However, India’s rank has dropped on two fronts — getting credit and paying taxes. With respect to getting credit, the country’s position has declined to 42 from 36 last year while it has declined to 157 from 156 in terms of paying taxes.
