India gained 12 positions and ranked 130 out of 189 countries as per the report. If they start operating which we fully expect in the near future that will mean improvements for next year’s ranking. India’s distance to frontier (DTF) score used to compile the rankings improved to 54.68 in 2016 from 53.97 in 2015.
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It also slipped one spot in the criteria of ease of paying taxes. “We believe that India can easily reach double digit ranking in next year’s survey”, he added. The majority of the reforms were created to improve the efficiency of regulations by reducing costs and complexities. The government targets breaking into the top-50 ranking within three years (by 2017).
“South Asian economies have been advancing steadily in recent years in improving their regulatory environment and making it more business friendly”, said Rita Ramalho, manager of the Doing Business project.
The World Bank report also says that among all other countries, India is the one that have made maximum improvements. On the face of it, not a very pretty statistic but the good news is that after many years India has finally moved up the ranks by a significant 12 places.
The report’s release comes just as the Narendra Modi government has begun its 18th month in power.
The United Kingdom also overtook the U.S. which maintained its seventh place position in the report, which evaluates the impact of regulation on the ease of doing business. The report states that 66 reforms were undertaken by 53 countries in this direction which focussed on in the area of getting credit, many of such reforms were especially undertaken in sub-Saharan Africa.
“Fostering an environment more supportive of private sector activity will take time”. If you look at the Indian market as a whole you will see very strong macro fundamentals, you see a really large market that is definitely growing very fast because of the demographics and the economic growth and that is therefore a very different picture.
“In the past year, India eliminated the paid-in minimum capital requirement and streamlined the process for starting a business”.
Several other initiatives to simplify the start-up process were still ongoing on June 1, 2015, the cutoff date for this year’s data collection. “Now companies can get connected to the grid, and get on with their business, 14 days sooner than before”, the report said.
“It is really a good news that on starting a business, on getting an electricity connection, e-filling to taxes, trading across borders, India has already taken actions since May, 31”, he said.
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“Getting construction permits and enforcing contracts (are the areas) where India is really very close to the very bottom”, Ruhl added. “The main reason behind the drop with respect to last year’s published ranking is the new calculation of the ranking based on the methodology expansion”. However, the economic situation in the country has reduced the number significantly to 29 days this year.
