India Scores Big!
30 days is the time it takes now to register a new business in India
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India’s ranking in the World Bank’s latest Ease of Doing Business Index has seen a vast improvement – it has gone up 30 places, and it now figures in the top 100 countries of the 190 countries surveyed.
“India made big efforts in the last three years and the present report is not just last year’s reforms,” a World Bank official said.
India aims to break into the Top 50 league in the next one year, a commitment made by the Narendra Modi government.
The latest rankings are based on surveys held in Mumbai and Delhi. Even today, in the most developed clusters of the country, entrepreneurs are subjected to archaic laws. For instance, in Mumbai, an entrepreneur has to go through 12 procedures to start a business – in sharp contrast to developed countries where one can start a business by going through five procedures. Of course, the time required to register a new business in India is around 30 days, down from 127 days 15 years ago.
Still, the latest index comes as a shot in the arm for the Modi government, and reinforces its reformist credentials. The Opposition in the country was not too happy, with some of them calling it “a foreign survey, divorced from Indian realities”.
The GST has not been factored in, in this year’s rankings, and the landmark indirect tax legislation and the bankruptcy law may further improve India’s ranking in the coming years.
“Indirect tax reform (the Goods and Services Tax) had become law by June, but was implemented from July. We will get credit for it in future rankings,” Union Finance Minister Arun Jaitley said after the rankings were released.
He further added, “In parameters such as doing business, dealing with construction permits, enforcing contracts and registering property where India is still lagging behind, we can improve our position significantly.”
India is now working on some 90 specific reforms, which will ensure that it breaks into the Top 50 league.
India was earlier the last among the BRICS (Brazil, Russia, India, China, South Africa) countries in the rankings. Now it has overtaken Brazil. China’s position remains the same. Russia is the best among BRICS countries – it is ranked at 35.
On protecting minority investors, India got its highest ranking, by rising to the fourth position from 13th last year.
Enforcement of contract, however, is an area of concern. Today, the time to enforce a contract is 1,445 days, compared to 1,420 days 15 years ago. India is thus at 164th position on the enforcing contracts indicator.
1. Resolving Insolvency: Rank improved from 136 to 103
2. Paying Taxes: Rank improved from 172 to 119
3. Getting Credit: Rank improved from 44 to 29
4. Enforcing Contracts: Rank improved from 172 to 164
5. Protecting Minority Investors: Rank improved from 13 to 4
6. Construction Permits: Rank improved from 185 to 181
— Team BW