Ease of doing business: Here is the next step Narendra Modi government is set to take

By: | Published: November 2, 2017 6:15 AM

The government will further step up focus on sensitising private-sector stakeholders, while continuing with the pace of reforms.

The government will further step up focus on sensitising private-sector stakeholders, while continuing with the pace of reforms. (Image: Reuters)

Encouraged by India’s unprecedented 30-notch jump in the World Bank’s ease of doing business index this year and by what positive comments of stakeholders can potentially do, the government will further step up focus on sensitising such private-sector users, while continuing with the pace of reforms, according to a senior government official. Although the Modi government undertook several administrative reforms in recent years to improve ease of doing business, its engagement with stakeholders rose sharply only since last year, when its series of administrative reforms failed to drive up the ranking. “The decision to sensitise stakeholders in a big way was the obvious choice, as despite a series of strong administrative reforms, our rank hardly improved last year. So we wanted to sensitise them — the public-sector and private-sector stakeholders and states — about the measures taken by the government and how they can benefit from these,” the official told FE.

India was placed at 130 of 190 countries in the Bank’s ranking last year, only a notch above than the previous year. By contrast, the country was ranked 100th for the first time this year on the back of further administrative reforms and better stakeholder consultations. The fact that India’s rank in resolving insolvency rose 33 notches despite the fact that the first such resolution took place after the survey deadline was over further underscored the importance of positive reviews by stakeholders.

Fixing GST hurdles fast a must now

Since the latest improvement in the overall ease of doing business was driven to a considerable extent by a massive 53-notch in the “paying taxes” parameter, the government has to fix any perceived glitches in the GST regime fast. This is because the World Bank’s survey period for “paying tax” runs from January through December (for other segments, it’s usually from June through May). While the GST wasn’t factored in in the latest ranking, as it was rolled out after the survey period was over, it will be a major driver of India’s ranking next year. So, the government has a tough job to fix GST-related hurdles before December to ensure that stakeholders give positive feedback on it.

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