The banks functionaries stressed that since the cut-off date for the report was May 31, 2014, the drop in Indias ranking is not connected in any way with the Narendra Modi government. They also expressed confidence that, helped by steps taken by the new dispensation to cut red tape and improve administration, the countrys standing would improve significantly next year.
Indias slippage was nevertheless unnerving, especially given the fact the country ranked a deplorable 186th when measured by the metrics of Enforcing contracts and 184th in the category of Dealing with construction permits.
The only category India improved significantly from its position in the previous report was Protecting minority investors, where Indias rank in the latest survey was a creditable 7, up 14 notches from a year ago.
In the 2014 report, India had 52.78 points and this year, it scored 53.97 points; yet, it dropped in the pecking order because others improvement was steeper.
Augusto Lopez-Claros, director, Global Indicators Group, Development Economics of the World Bank Group, said: It is absolutely true that the new government of Mr Modi has made it very clear that they see the creation of a better investment climate and a more business friendly environment in India a top priority. However, it is important to remember that the new Government did not come into office until the second half of May.
Singapore with 88.27 points occupies the top position in the ease of doing business followed by New Zealand, Hong Kong, Denmark and South Korea. Among other major countries, the US has been ranked seventh (the same as the previous year) while the UK improved to eighth slot from 7th last year. China was ranked 90 (against last years 93) while Sri Lanka (99), Nepal (108), Indonesia (114), Maldives (116), Bhutan (125), and Pakistan (128) got higher rankings than India in the latest survey.
Lopez-Claros agreed with a questioner that it is possible for India to achieve a ranking within the top 50. Absolutely, it can be done. There are many examples of countries who through focused efforts, through intelligently designed reforms have managed to make very substantial improvement, he said.
In the 10 metrics used to measure ease of doing business, India was ranked 158th in Starting a business, 137th in Getting electricity, 121st in Registering property, 36th in Getting credit, 156th in Paying taxes, 137th in Resolving insolvency and 126th in Trading across borders.
Starting a business in India (measured for the countrys business capital, Mumbai) involved 13 procedures and 30 days as against OECDs 4.8 procedures and 9.2 days, the World Bank noted. Dealing with construction permits took 27 procedures and 162 days, getting electricity 7 and 67, registering property 7 and 47 and enforcing contracts 46 and 1,420.
The Modi government has taken several steps to reduce rigidity of labour norms, besides taking many incremental steps aimed at improving administrative efficiency. It also assured global investors that the tax regime would non-adversarial and devoid of uncertainties.