How India galloped to hit a century in ease of doing business

SAURAV THAKUR

It’s a bright day for entrepreneurs and businessman as India has climbed up 30 places in world bank doing business 2018 report to hit a century, amidst the ongoing chaos around the steps being taken by Modi government, this news will certainly ease up some minds.

About doing business

The doing business report covers 190 economies across the globe, launched in 2002 it looks at small and medium-sized companies. It also offers detailed subnational reports which offer ease of doing business across the cities and regions in the country. It serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy.

When first published in 2003 It was based on 5 indicators and covered 133 economies. The doing business report 2018 is centred around the following metrics:

• Starting a business
• Dealing with Constructional Permits
• Getting electricity
• Registering property
• Getting credit
• Protecting minority investors
• Paying taxes
• Trading across borders
• Enforcing contracts
• Resolving insolvency
• Labour market regulation

India improved its ranking in six of the 11 metrics used for evaluation, and in the process, became the only large economy to do so in this year

India has made remarkable progress in following fields:

Resolving insolvency

India has received a boost in its standing, jumping from 133 to 103. This can be contributed to the enactment of big bang insolvency and bankruptcy code(IBC) last year. This reform is meant for tackling bad loans and non-performing assets which have troubled our banking systems for so long.

Paying Taxes

India has hurdled its way from 172 in 2016 to 102 this year. This rise in rankings can be contributed to the implementation of GST.

Before GST implementation we had a multi-level system when it came to paying taxes. GST has solved this problem and after it’s full implementation is expected to further improve the tax system in India.

GST committee is also planning to rank different organizations based on their tax payment records which will further contribute to their cause.

Protecting minority investors

India has ambled in this metric hopping 5 places from rank 9 in 2017 to attaining the 4th place in 2018. This boost is expected to promote investor sentiments and address issues such as red tape and facilitate businesses.

Shifting to digitalization is also one of the major causes of this tectonic shift in rankings. Although in the beginning it suffered because of lack of required bandwidth and inadequate hardware, the issues have been resolved for now. Noticeably the time taken to apply for a new business has shortened from 3 weeks to a few hours.

This jump in ease of doing business is expected to increase foreign direct investments(FDI’s) and also boost the spirit of medium and small-sized companies. It also reflects upon the efforts poured in by Modi government which was not shown in DB 2016 report where India marked a shift of one place only from 131 to 130.

Reference- doing business 2018 report