All eyes will be on the Doing Business Report, 2018 that the World Bank plans to release on Tuesday even as the government remains optimistic about India’s growing business-friendliness, driven by key reforms initiatives in recent years.
The Narendra Modi government, which has vowed to remove red-tape, eliminate procedural delays and turn India into a sought-after investment destination, has set a target of leapfrogging to a rank of 90 in 2017-18 and 30 in the Doing Business survey by 2030.
Last year, India’s ranking in the report improved by just one notch to 130, indicating a gap between policies and their implementation.
The World Bank every year publishes its Doing Business report that ranks 190 countries on how easy it is for companies in terms of doing business, as well as following certain regulations based on ten parameters such as starting a business, getting electricity, dealing with construction permits, getting credit, paying taxes, protecting minority investors, resolving insolvency and more.
India was among the top 50 countries in three parameters—13th position in protecting minority investors, 26th in getting electricity and 44th in getting credit. However, it was ranked among the worst in dealing with construction permits, resolving insolvency, registering property, trading across borders, paying taxes and enforcing contracts.
The rankings are based on field surveys and interviews with corporate lawyers and company executives in Delhi and Mumbai. The report generally takes into account reforms implemented only up to June for that particular year. A high ease of doing business rank implies that the regulatory environment is more conducive in the country, for beginning as well as continuing operations of an organisation.
Last one year witnessed crucial reforms in the country including a new law on bankruptcy, massive currency culling exercise to weed out black money and the overhaul of the indirect tax system, consolidating local and central duties into a single levy known as the Goods and Services Tax (GST). However, the impact of GST, which was rolled out from July 1, may not be a part of the World Bank report.
The government expects a significant improvement in India's ranking with the implementation of the Insolvency and Bankruptcy Code the rollout of GST.
In August, government's policy think tank NITI Aayog launched the Ease of Doing Business report, which said that there is a wide gap between what enterprises know and what the government officials say they have done to improve procedures related to various permits and clearances. According to the report, companies across the country have low level of awareness about the single-window system of the states for procuring regulatory clearances, with only about 20 percent of start-ups ever using such facilities.
The nationwide survey of 3,500 manufacturing firms across all states and union territories was conducted along with a Mumbai-based think tank IDFC Institute, to assess the business environment from the viewpoint of companies.
The survey also suggested that information should be disseminated in a way that firms are aware of ways to ease the compliance burden of regulation, such as access to single clearance windows, and are able to yield substantial gains in productivity at relatively low costs, it had suggested.
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