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Ease of doing business LIVE: India moves to top 100 ranks for first time, jumps 30 places, says Arun Jaitley

For Prime Minister Narendra Modi, ease of doing business is a prestige issue. Will the World Bank ranking give him a chance to celebrate and counter the critics?

FP Staff October 31, 2017 19:13:41 IST
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Ease of doing business LIVE: India moves to top 100 ranks for first time, jumps 30 places, says Arun Jaitley

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Oct 31, 2017 - 20:38 (IST)

Doing Business 2018 Fact Sheet by World Bank 

The World Bank released a fact sheet on the substantive changes India implemented 2016/17. Here are the areas where India has seen a change:

Starting a business: India made starting a business faster by merging the applications for the Permanent Account Number (PAN) and the Tax Account Number (TAN) and by improving the online application system. Mumbai also made starting a business faster by merging the applications for value-added tax and the Profession Tax (PT).

Dealing with construction permits: India reduced the number of procedures and time required to obtain a building permit by implementing an online system that has streamlined the process at the Municipality of New Delhi and Municipality of Greater Mumbai.

Protecting minority investors: Protections for minority investors were strengthened by increasing the remedies available in cases of prejudicial transactions between interested parties. This reform applies to both Delhi and Mumbai.

Paying taxes: In both Delhi and Mumbai, paying taxes was made easier by requiring payments to the Employees Provident Fund to be made electronically, and introducing administrative measures that make it easier to comply with corporate income tax regulations.

Resolving insolvency: India made resolving insolvency easier by adopting a new insolvency and bankruptcy code that introduced a reorganization procedure for corporate debtors and facilitated the continuation of the debtor’s business during insolvency proceedings. This reform applies to both Delhi and Mumbai.

Read more here

Oct 31, 2017 - 20:29 (IST)
Oct 31, 2017 - 20:27 (IST)

India is one of the top-10 improvers across the world this year: World Bank vice-president Annette Dixon tells ANI 

Oct 31, 2017 - 20:24 (IST)

Oct 31, 2017 - 20:24 (IST)

Demonetisation not considered in ease of doing business 2018

The World Bank’s survey didn’t consider the Demonetisation factor and it wasn’t measured in this index. Read the report here.

Oct 31, 2017 - 20:20 (IST)

Narendra Modi on the ease of doing business ranking 

Oct 31, 2017 - 20:18 (IST)

Impact of GST on rankings may take 2 to 3 years: World Bank vice-president

On the impact of GST, World Bank vice president (South Asia region), Annette Dixon said that GST was a complicated reform to have rolled-out. Steps taken by the government this year may take 2 to 3 years to show results. This factor will be considered next year or after that. 

Oct 31, 2017 - 20:15 (IST)

Principal Director General of Press Information Bureau Frank Noronha notes the reasons behind India's ranking jump

Oct 31, 2017 - 20:14 (IST)

Arun Jaitley says that he believes in Modi's conviction that India can immediately reach in top 50 ranks 

"There is scope to jump up from rank 100," Jaitley said in the presser. There is reason to believe we have further capacity to improve, he added saying that when the NDA first came to power, Prime Minister Narendra Modi said that India can immediately reach the top 50 ranks. "I think this is believable," Arun Jaitley said, believing that India can expedite the process of India raising the bar in the rankings. 

Oct 31, 2017 - 20:09 (IST)

Numerous metrics see witness improvements in ease of doing ranking

We were ranked 142 in 2014 and 130 last year in ease of doing business World Bank list, Jaitley said, highlighting how significant India's jump in the metric was. The World Bank report says India is one country which has been undertaking structural reforms, Jaitley said in a category where India has been ranked fourth. India has also seen betterment in protecting minority investors, the finance minister informed. As for resolving insolvency, India moved from rank 136 to rank 103. He also said that India jumped 53 places to 119 in ease of paying taxes. Considering how GST was implemented on 1 July, Jaitley pointed says that there is scope for India's rank to improve in this category even further in the future. 

Will the World Bank's ease of doing business ranking for 2018 give a relief to the Narendra Modi government, which is drawing flak from within the BJP and outside for messing up the economy?

If the media reports, citing highly placed sources, are to be believed, it will. The country is likely to have jumped 30 places to hit 100th spot in the ranking that takes 190 countries into account, said recent reports.

The World Bank's rankings will be released on Tuesday 7:30 pm. Finance minister Arun Jaitley will also hold a press conference following the release of the report.

A report in The Hindu newspaper said the rise in the ranking is due to the changes in areas such as ‘starting a business’, ‘dealing with construction permits’, and ‘resolving insolvency’. Last year, when India moved just one notch up, the ranking in these areas were 155, 185 and 136.

“The low-rank last year galvanised India to act. There was an explicit order from the Prime Minister (Narendra Modi) to ensure faster reforms to improve India’s rankings,” a source has been quoted as saying in the report.

Ease of doing business LIVE India moves to top 100 ranks for first time jumps 30 places says Arun Jaitley

File image of Prime minister Narendra Modi. PTI

According to this source, Mumbai and Delhi responded well to the government’s exhortation to better the environment, thus resulting in the jump.

“The successful implementation of the insolvency code and the goods and services tax (GST) has given a big boost to India’s business environment,” a top government official has been quoted as saying in another report in The Economic Times.

However, it has to be remembered that even the 100th position is a far cry from what Prime Minister Narendra Modi's initial wish. He had said that his aim is to take the country to the top 50 rankings in the World Bank report.

Ironically, the news comes at a time when small businesses are struggling with the goods and services tax, the indirect tax reform that the government implemented from 1 July. The government has tweaked the norms many times already in a bid to help the small traders tide over the cumbersome procedures.

Prior to that in November 2016, the government's shock demonetisation of Rs 500 and Rs 1,000 notes also had dealt a body blow to some of the cash-intensive small and medium businesses. The move had sucked out 86 percent of the currencies under circulation, resulting in a cash crunch that crippled the economy.

Both the moves have pulled down the GDP growth in the first quarter of the current financial year to the three-year low of 5.7 percent, prompting political leaders and economists from BJP and outside to slam the government.

Prime Minister Narendra Modi and his ministers will use any jump in ease of doing business ranking to counter the critics, whatever the ground reality is.

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