According to World Bank ‘Doing Business’ report, India now ranks 130 out of 189 countries in the ease of doing business, moving up 12 places from last year. The World Bank said India 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. Here are 10 key takeaways in terms of reactions from India Inc as represented by industry bodies Assocham, CII and also by business consultancy Grant Thornton:
1. The improvement in India’s ease of doing business ranking proves the reform agenda undertaken by the Narendra Modi government is bearing fruit.
2. While anticipating that India’s ranking will get better in the future, India Inc leaders said “a lot more needs to be done” to unshackle the laws which are creating problems, be it in taxation, land acquisition, clearances and Inspector Raj.
3. Good signal will be sent to investors and will put a stamp on the measures that are being undertaken by the government both at Centre as well as the state level for removing the irritants. Government’s efforts in enhancing ease of doing business and providing an enabling environment for growth of industry has yielded results.
4. Various reforms have been taken for simplification of rules, procedures and compliances and many more are underway. The government is proactively working with the states in streamlining various processes.
5. World Bank clearly reflects the large scale and fast paced reforms for improving the regulatory environment and streamlining of processes as part of the government’s ease of doing business campaign.
6. The improvement in rankings by 12 places is an exceptional feat given that large economies do not move more than 10 places in rankings in one year.
7. In all the actions taken by the government over the last year there is a clear pro-development pattern emerging, which is making India a preferred destination for doing business.
8. Government must address the need to significantly reengineer the legal system as one thing India has fared very badly is on enforceability of contracts to ensure fair and speedy justice and predictability of the business environment.