India jumps again in World Bank’s Ease of Doing Business Rankings
India has improved on its recent success in ease of doing business to reach its best ever ranking of 63rd in the World Bank’s Ease of Doing Business Rankings for 2019, up from 77th in 2018.
This 14-place improvement put India in the top 10 most improved countries for the third year in a row, an impressive feat. This is even more impressive when you consider that India was ranked 142nd as recently as 2014 – when Narenda Modi first took power as Prime Minister.
Modi has consistently set out to reform the Indian business environment, recognising that doing so is essential not only for internal growth but also to attract foreign investment, an important facet to drive India’s growth if it is to reach the Government’s goal of a $5 trillion economy.
Reforms have centred on boosting the private sector as well as attracting foreign investment. The ‘Make in India’ initiative is focused on improving India’s share of global manufacturing for instance. Streamlining regulations, including the Goods and Services Tax (GST), improvements to infrastructure, and utilising technology have all been further benefits to business.
The World Bank’s Ease of Doing Business ranking is based on quantitative indicators across ten topics: India ranked 136th on starting a business; 27th on dealing with construction permits; 22nd on getting electricity; 154th on registering property; 25th on getting credit; 13th on protecting minority investors;115th on paying taxes; 68th on trading across borders; 163rd on enforcing contracts; and 52nd resolving insolvency. Clearly, some of these are exceptional while others require further improvement.
According to the World Bank, India’s reforms in these areas in the last 12 months have focused on starting a business, dealing with construction permits, trading across borders, and resolving insolvency.
Successful implementation of the Insolvency and Bankruptcy Code has made it easier for secured creditors to seize companies in default of their loans. At the same time, India made trading across borders easier by upgrading port infrastructure, enabling post clearance audits, integrating trade stakeholders in a single electronic platform, and enhancing the electronic submission of documents.
Completing the necessary procedures to build a warehouse now costs 4 percent of the warehouse value, compared to more than 5 percent prior to reform. Building quality control measures were also improved, and India is now world-leading in this area, as only six economies in the world improve on India’s 14.5 out of 15 on this index.
The Government of India must continue to follow up on further reforms and remain invested in long-term developments to maintain India’s improved ranking and push closer to reaching the Government’s target of a top 50 ease of doing business nation.
For detailed analysis of what UK businesses think of the ease of doing business in India, look out for the UKIBC’s annual Doing Business in India Report which we will publish in mid-November. This will contain some fascinating insights, including into the level of corruption in India, the impact of Brexit on UK companies’ plans for India, and which Indian states are making the biggest improvements in the ease of Doing Business.