India has risen 14 notches to be ranked the 63rd best country to do business, on the back of “sustained business reforms”, a study released by the World Bank Thursday showed. The improved ranking comes on the back of reforms that have made it easier to conduct business specifically in two cities in the country, i.e. Delhi and Mumbai, the study shows.
India is also among the top 10 improvers for the third year in a row. Pakistan, which improved its rank by 28 spaces to place 108 on the index, is also among the top 10 improvers. “Given the size of India’s economy, these reform efforts are particularly commendable,” the report said.
Finance Minister Nirmala Sithraman said, “We’ve been impressing upon with the World Bank that having just two cities Delhi and Mumbai may not be adequately representative and I’m very glad that from this coming year, Kolkata and also Bengaluru will be added to the list of cities surveyed.” She also said the Centre would take “all efforts” to reach the top 50 ranks by next year.
Given that India only improved by one rank in the ease of starting a business, the FM said she would want to “consciously make sure that the department of industry together with us and all others concerned will make enough effort to improve on that scale as much as we’ve done on resolving insolvency.”
On GST simplification with regard to “paying taxes”, Sitharaman said that GST is an ongoing process and the government wants to make sure that all steps are taken to simplify compliance.
The World Bank’s Doing Business 2020 study ranks 190 countries on the freedom they provide to conduct business by measuring aspects of business regulation that affect small domestic firms located in their largest business cities. India is among the 11 economies for which a second city is covered.
The country, which was ranked 77 last year, has shown the most improvement in four out of 10 parameters this year — starting a business, dealing with construction permits, trading across borders and resolving insolvency.
India has made it easier to start a business in Delhi and Mumbai by abolishing filing fees for the SPICe company incorporation form, electronic memorandum of association, and articles of association. It has also reduced the time and cost of obtaining construction permits and improved building quality control by strengthening professional certification requirements in Delhi. In Mumbai, the process of obtaining a construction permit has become faster and less expensive.
Delhi and Mumbai have helped India achieve a high rank in factors like the ease with which businesses can get electricity. However, the two cities are serviced by private electricity distribution companies that are expected to operate more efficiently than state-run discoms that operate in most other cities in the country.