This year, India jumped 23 places to secure 77th rank in the elite index by making a slew of business-related reforms, including Goods and Services Tax (GST) and Insolvency and Bankruptcy Code.
After India taking a leap of 65 positions in the World Bank Ease of Doing Business (EoDB) rankings in last four years, Prime Minister Narendra Modi has set an ambitious deadline of December this year to implement reforms that can get the country into the top 50 on the list as early as next year.
This year, India jumped 23 places to secure 77th rank in the elite index by making a slew of business-related reforms, which included Goods and Services Tax (GST) and Insolvency and Bankruptcy Code (IBC).
Meanwhile, the World Bank’s Country Director for India Junaid Ahmad said earlier this week that it will add another indicator called “contracting with the government” to assess a country’s ease of doing the business ranking. The new indicator would assess contracting public procurement system of the governments across the world.
However, industry experts believe that the target is a little tough and challenging, but it is definitely within reach. The country is now well-poised to figure in the top 50 nations in this list, they say.
Here is what experts think can help India to break into top 50
Rashesh Shah, President, FICCI
The government now needs to keep the reform momentum going. In the area of taxation, indirect tax reform has to be taken to the next level by bringing in the excluded items, including petroleum products, in the GST ambit; and on the direct tax side, a new Direct Taxes Code must ensure that the income tax burden on the companies comes down along with the simplification of the tax structure. We still have a huge scope for improvement in Contract enforcement and Starting a new business arena – improvements in these will improve the ranking further.
The MSME industry needs more money to invest and easy credit availability and these also will play a critical role in improving the country’s rankings in ease of doing business. The move to take these Ease of Doing Business ranking to States level and now extending this to District level is a great initiative.
Rajesh Srivastava, Chairman and Managing Director, Rabo Equity Advisors
If I can suggest one big step, the Governments (especially State Governments) should ensure that they do not renege on their promises irrespective of the political changes. Subsidies, tariffs, duties and even intangible “support” offered to attract investments should be fully honoured. Another suggestion is for all States to post information on project approvals on the line every month to drive full transparency and thus disincentivize any intentional or unintentional delays. Investors have an invisible bonding; one State going back has a cascading effect on other States and of course the Centre.”
Vishwas Udgirkar, Partner, Deloitte India
It is ambitious but not impossible. With right steps, initiatives and sponsorship at the top, it could be achieved. The government did put in very focused attention and efforts over the last few years to bring in improvement/reforms that lead to improvement in rankings. While the government needs to continue that efforts they should also put in extra efforts on remaining aspect wherein there is a further scope. Use of technology/digital should be used eg Blockchain in property registration will further help. While India’s ranking improved over the last two years – in some processes/areas it has not improved rather came down. The government needs to focus/put in extra efforts to bring in improvement eg paying taxes, insolvency processes, minority rights property registration.
Associated Chambers of Commerce and Industry of India (ASSOCHAM)
We believe that expediting the reform process is the need of the hour to reach the top of the ‘ease of doing business’ rankings, which would also result in the inflow of investments and boost GDP growth. Certain key areas that need to be incorporated by the Government in its policy decisions that would help India break into top 50 World Bank Ease of Doing Business Index include: i) Devolution of powers to decentralise the system for faster decision-making; ii) Consolidation of rules and different regulations that serve the same purpose; iii) Introduction of a credible Third-party certification mechanism to provide simpler compliance processes; iv) Vast improvement in rank and score pertaining to trading across borders, which can be done using executive order and use of technology unlike other parameters which require change/amendment in law; v) Bringing in measures to improve paying taxes, such as uniform rate of interest on refunds and ensuring GST refund within 90 days.
Sanjiv Kaul, Partner, ChrysCapital
It is definitely doable (India reaching top 50 on World Bank Ease of Doing Business ranking). Clarity, transparency and consistency of policies are extremely important for any investor. Governments may come and governments may go; the investments and the thesis behind the investments should not be subject to new development like the change in government or a subjective interpretation by regulators.