Implementation of the Goods and Services Tax (GST) from April 1, 2017 would further improve India’s competitiveness and ease of doing business ranking, finance minister Arun Jaitley said. The finance minister’s remarks come after the World Economic Forum released the Global Competitiveness Index, according to which India climbed 16 places to the 39th spot in the index among 138 countries as against 55th position last year.
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“It (Global Competitiveness Index) significantly holds a mirror on where we are doing well and what we need to improve. And I think, keeping the popular aspirations and reform agenda of the government, there is a possible continuous improvement in the goods market through the GST. I am sure that this momentum in the last two years, when we moved from position 71 to 39, there is a consistency and therefore we also know where we are to improve,” Jaitley said.
Jaitley said that there are areas such as healthcare and education where India needs to do more in order to improve its ranking in Global Competitiveness Index. “With regards to the ICT also there are some negative indications. But with the implementation of Digital India, the report indicates that India is likely to move up,” he said.
He pointed that amongst the BRICS countries, China is slightly ahead of India at 28th position. “…we come second to them at 39. If you recollect, between 2007 and 2014, we were broadly in the 60-70th range (of ranking). And in 2014-15, when the new government had taken over, we were rated at 71st. Since day one, the series of steps, which have been taken for structural reforms, we moved up to 55th in 2015-16. There was a jump of 16 positions. And now there is a further jump of 16 positions in 2016-17 when we are at 39th,” Jaitley added.
The report shows that there are still several important areas that the country needs to focus on and that includes infrastructure development, the use of technology and efficiencies in the labour market.
Asked if the reform measures would get reflected in the World Bank’s forthcoming Ease of Doing Business ranking to be released later this year, Jaitley said: “There was a cut off date for that. After that cut off date, many steps were taken. If you see GST, Bankruptcy and Insolvency Act happened after that. So it’s a continuous process. What has not been reflected would come up in the counting next year.”
Economic affairs secretary Shaktikanta Das highlighted that there are areas such as strength of investors’ protection, gross national savings and venture capital availability where India has been ranked higher. GST will have a big impact on both ease of doing business and on world competitiveness rankings, he added.