India Inc on Thursday cheered as the country jumped 14 places to the 63rd position on the World Bank's ease of doing business ranking, and said the performance was an indicator of the Narendra Modi-led government's reformist credentials.
Industry bodies exuded confidence that India will climb the rankings further to be among the top 50 nations on the World Bank's 'Doing Business' 2020 report, as envisioned by the Prime Minister.
— CNBC-TV18 (@CNBCTV18Live) October 24, 2019
"The reform initiatives aimed at digitising, streamlining and rationalising regulatory compliances and procedures have imparted a huge fillip to the investor sentiment by ensuring faster processes, lower transaction costs and greater transparency," CII Director General Chandrajit Banerjee said.
He said the extraordinary jump in the ranking is an outcome of sustained and consistent multi-year business reforms, especially in the indicators of starting a business, dealing with construction permits, trading across borders and resolving insolvency, where the country has noted remarkable improvement.
"I am confident that this momentum of business reforms will be maintained and India will be among top 50 destinations as was envisioned by our PM," Banerjee said.
"Reformist credentials of the @narendramodiji's government has unlocked yet another milestone. From 142nd to 63rd place in the @WorldBank ranking in 2019 is a great achievement for a growing economy and it would boost opportunity for foreign trade #EaseOfDoingBusiness," Assocham Balkrishan Goenka tweeted.
Stating that improvement in the ranking is the true reflection of the diligent efforts, PHD Chamber of Commerce and Industry President D K Aggarwal said the government should focus on the reforms in land acquisition, implementation of fixed-term employment in all the states and de-criminalisation of businesses as stringent labour laws are a major roadblock to enhance production possibility frontiers and employment generation in the economy.
"Going ahead, we look forward to further improvement in ease of doing business to the level of below 50 in the next year's ease of doing business rankings," Aggarwal said.
Experts weigh in with their reactions:
Shyamak Tata, Chairman, Deloitte
The development puts India in the rank of the most-favoured investment destinations, indicating an environment that encourages foreign investors to become part of the Indian growth story.
Ramesh Abhishek, former Department for Promotion of Industry and Internal Trade (DPIIT) Secretary
The ranking shows how much can be achieved with a strong political will and a total commitment of officials to reforms. The government process re-engineering, massive use of technology and constant engagement with users have helped India in improving its position in the ranking, he added.
Ranen Banerjee, Leader Public Finance and Economics, PwC India
The jump in ranking is a sentiment boosting news. It comes at an opportune time when global investors are looking at relocation or additional locations for their manufacturing operations to mitigate their geopolitical risks emerging from the trade wars. We need to send out a strong message to investors that we have stable governance and regulatory certainty on the back of this jump in rankings to further attract global capital to India.
Bhavin Turakhia, Founder & CEO, Flock
India has been consistently moving up the charts when it comes to World Bank’s ‘Ease of Doing Business’ rankings. This is a positive sign from a business standpoint. We welcome the initiatives undertaken by the Government of India in simplifying the process of setting up business operations. The jump in ranking augurs well for the startup ecosystem and enhances India’s perception as a global business destination. I believe this will go a long way in enabling the country to achieve its goal of becoming a $5 trillion economy by 2025.
Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas
For rankings improvement to translate into massive investments, Indian policymakers need to focus on significantly boosting global investor confidence, which can only happen if India can define an investment ideology, with long-term policy roadmaps for the overall economy and key the sectors therein. Unexpected policy changes impact underlying investment logic and upset foreign investors; overall I am positive that we are on the right track.
Utkarsh Sinha, Managing Director, Bexley Advisor-a boutique investment bank focused early-stage deals in tech and media
We have been making progressive strides in this space, and the fact that we have climbed up 14 steps in the global ranking is quite commendable. These rankings are of particular importance as they are a key decision factor when foreign investors determine FDI flows. One should note, however, that these ranking improvements are incremental: tracking rankings on a yearly basis would be counterproductive, however, the fact that India enjoys an upward trend is a strong signal indicating we are open for business and bullish on wealth creation, and capital growth.
Vikram Kirloskar, President, CII
Resolving Insolvency has shown an impressive jump of 56 spots, endorsing the successful implementation of the Insolvency and Bankruptcy Code, 2016. Similarly, in ‘Dealing with Construction Permits’, we have now joined the league of the top 27 countries, laying a foundation for stronger growth of the real estate sector. Another significant milestone has been achieved in the area of ‘Trading Across Borders, where we now stand at 68th rank, up from 146th in 2018. Procedures, time and cost for export and imports have been coming down sharply with the continuous introduction of trade facilitation reforms. We have, of course, a long way to go in several other indicators of Doing Business Report, including Enforcing Contracts, Registering Property, and Starting a Business. With continuing reform momentum and government-Industry partnership, I am confident of excelling in these areas as well within the next couple of years.
Anurag Saxena, Global Head-Strategic Initiatives, MicroSave Consulting (MSC).
In the backdrop of the weak GDP numbers, the Union government budget this year presented an ambitious target to be $5 trillion economy in the next five years. The finance minister also highlighted the role of private sector investment as a driver to achieve these ambitious targets. India’s consistent improvement in World Bank rankings for ease of doing business is a positive vibe and helps in maintaining a positive sentiment. This improvement in ranking confirms an independent assessment of the progress made by country in many of the eleven areas covered under this ranking. At the same time, entrepreneurs in India are looking for better visibility of policy directions in crucial areas such as e-Commerce, data protection, electric vehicles, etc. The most important task in hand is to take these rankings as one of the indicators and fast track policy-driven reforms across many other areas specific to a diverse set of businesses in India.
Rohinton Sidhwa, Partner, Deloitte
The report covers two cities—Mumbai and New Delhi, and a single window for construction and labour-related compliance in these cities have contributed to the improvement.
Rakesh Reddy, Director, Aparna Constructions & Estates Pvt. Ltd.
India has enacted many policy interventions over the past few years, especially in real estate, which undoubtedly has a far-reaching impact on India’s overall economic performance. These transformative reforms have resulted in India improving 14 places to rank 63rd in the World Bank Ease of Doing Business ranking. The Real Estate Regulatory Act (RERA) has revived consumer confidence and laid the foundation for massive growth. RERA has the potential to be the most significant among these reforms. The overall goal of RERA is to protect the interests of home buyers in an efficient and transparent manner. It introduces a unified process and formality to the real estate industry that has long been fragmented and unregulated. RERA is a key driver in the revival of the real estate, and subsequently the economy at large.
Rishi Agrawal, Co-Founder and CEO Avantis Regtech Pvt Ltd
For the third year in a row, India has been one of the top improving economies in the World Bank Ease of Doing Business ranking. This reflects the government's determined push towards reforms. India's rank has improved from 77 last year to 63 this year. India's reforms have stood out in four categories out of 10 - Starting a new business, Dealing with construction permits, trading across borders and resolving insolvency. This is extremely commendable. Further, there is a strong possibility that India breaks into the top 50 next year, the reforms since June 2019 (including the rate cut for corporates, easing GST returns process etc.) will be reflected only in the exercise next year. However, despite this creditable achievement, Indian businesses continue to be plagued by a high compliance burden of over 58,000 compliances, more than 3000 returns and over 2500 changes every year. To give just one instance of the high compliance burden, for a startup working from a home office or shared space, within its first year, it needs to obtain registrations under at least seven regulators and file a minimum of 18 returns to a maximum of 69 returns - this has to be rationalised at the earliest. The government needs to be focused on reforms in the three vector framework of rationalisation, digitisation and simplification, particularly in the categories that continue to stand out with poor performance - starting a new business (Rank 136), registering property (Rank 154) and enforcing contracts (Rank 163).
Aakash Vaghela, Co-Founder and MD, AV Organics
This is very laudable BUT we need to continue to improve. Having established a start-up at a time when the ecosystem is booming in India, it is not very hard to put a finger on what is driving this boom. The ‘Make in India’ campaign has not only attracted foreign investors, but has also focused on giving a major fillip to the Indian manufacturing sector. The reforms introduced in terms of ‘Trading across borders’ was another major move that improved India’s global status in ease of doing business. Furthermore, India has made a sterling achievement by abolishing filing fees for the SPICe (Simplified Proforma for Incorporating a Company Electronically) which has made operations for a company specially start-ups easy. With all of this at the backdrop, India’s improved ranking in the top 10 economies is not a surprise at all and we wish for speedy improvements to continue in years to come.
Shashank Dixit, CEO, Deskera
India has shown consistent growth each year when it comes to World Bank’s ‘Ease of Doing Business’ rankings. The country climbing to the 63rd position this year is a positive sign for the startup ecosystem. Several initiatives taken by the Government of India such as relaxing norms for obtaining a building permit, electronic submission of documents, etc. will go a long way in boosting the startup ecosystem and provide a much-needed fillip to India’s GDP growth.
Jitendra Chaturvedi, Director and Founder, Batooni Mobile Advertising
The environment for doing business in India has been cohesive for startups. With India jumping 14 spots to the 63rd position on the World Bank's ease of doing business ranking, is testament to the fact that the government has been undertaking various initiatives to simplify the process of registrations, licenses and compliance requirement to help startups set up business operations in the country with ease. We are positive that with the governments resilient focus on building a conducive business environment in India, it will further augment in creating a favorable ecosystem for business growth of startups and establish India as the favored investment destination globally.”
Kishan Jain, Director, Goldmedal Electricals
The efforts and commitment by the Government of India over the last few years in introducing economic reforms that harness a healthy business environment has resulted in India jumping 14 notches to the 63rd position in World Bank’s ‘Ease of Doing Business’ index. The continued focus on the promotion of ‘Make in India’ and other measures taken to attract foreign investment and boost manufacturing, is showing positive results. This should enable FMEG companies to expand their business further, resulting in the growth of new employment opportunities in the country. We believe all of this would have a positive impact on India’s GDP growth, making India a global business destination.
India jumped 14 places in rankings
India jumped 14 places to the 63rd position on the World Bank's ease of doing business ranking released on Thursday, riding high on the government's flagship 'Make in India' scheme and other reforms attracting foreign investment.
The country also figured among the top 10 performers on the list for the third time in a row.
The rankings come at a time when the Reserve Bank of India (RBI), World Bank, International Monetary Fund (IMF) and various rating agencies have slashed the country's growth forecasts amid a slowdown in the global economy.
India was ranked 142nd among 190 nations when Prime Minister Narendra Modi took office in 2014. Four years of reform pushed up India's rank to 100th in World Bank's 'Doing Business' 2018 report. It was 130th in 2017 when it was ranked lower than Iran and Uganda. Last year, the country jumped 23 places to the 77th position on the back of reforms related to insolvency, taxation and other areas.
In its report, the World Bank commended the reform efforts undertaken by the country "given the size of India's economy".
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Updated Date: Oct 25, 2019 09:01:25 IST