Skip to main content

India Scores a century

India Scores a century
Jumps 30 spots to 100 in world  Bank's Ease of Doing Biz Rankings
India has for the first time broken into the club of the 100 nations easiest to conduct business in, driven by ease of paying taxes, resolving the insolvency problem, access to credit, and protection of minority investors.The World Bank´s ´Doing Business 2018: Reforming to Create Jobs´ report, released on Tuesday, showed India´s rank in ease of doing business jumped 30 places to 100 among 190 countries.
India´s rank was 130ayear ago. India has also been adjudged the fifth bestperforming nation globally in reforming the business environment.The country improved its rankings in six of the 10 subcategories used by the World Bank to judge the climate of business.The report, covering the period from June 2 last year to June 1 this year, ranked India top among the South Asian nations.
India´s distance to frontier ratio, which tells how similaracountry´s economic practices are to global best practices, has improved in nine out of 10 categories.Also, it is now among the top 30 nations in three categories —getting electricity, securing credit and protecting minority investors.However, the World Bank noted that India lagged in areas such as startingabusiness, enforcing contracts, and dealing with construction permits.
"The systematic reforms by the country inapersistent manner have paid off," said Annette Dixon, vicepresident for the South Asian region, World Bank.The multilateral agency has recognised reforms by the government in eight subcategories.It said the country had adopted 37 reforms since 2003.

"Nearly half of these reforms have been implemented in the last four years," it said. The Narendra Modi government has been in power for the past three andahalf years.The World Bank did not specifically ask respondents about the implications of the GST.
It said the tax was not an issue mentioned byamajority of the respondents but added that it would haveasignificant bearing on India´s rankings over the next few years.
In the protecting minority investors, India is now the fourth best country in the world,ajump from the 13th place last year.The passage and implementation of the Insolvency and Bankruptcy Code (IBC) as well as setting up of sectoral regulators saw India climb 33 notches in the parameter for resolving insolvency.In access to credit, the country improved its ranking by 15 places to 29. Here, too, the insolvency process playedakey role. However, despite hoping to bagabetter rank in the securing construction permits category, India only improved to 181 from 184
The report has not taken into account the government´s demonetisation drive, which has led to widespread disruption in business and has also pulled down economic growth.It didn´t consider the goods and services tax either.Junaid Ahmad, country director of the World Bank, said they were not factored in because the report only took into account comparable factors across the world.
Vedanta Group Chairman Anil Agarwal said the robust rise showed the reforms by the government were finally bearing fruit, making India one of the most compelling investment destinations globally.
The Business Standard, New Delhi, Ist November 2017


Popular posts from this blog

RBI minutes show MPC members flagged upside risks to inflation

RBI minutes show MPC members flagged upside risks to inflation Concerns about economic growth and easing inflation prompted five of the six monetary policy committee (MPC) members to call for a cut in the repo rate, but most warned that prices could start accelerating, show the minutes of the panel’s last meeting, released on Wednesday. The comments reflected a tone of caution and flagged upside risks to inflation from farm loan waivers, rise in food prices, especially vegetables, price revisions withheld ahead of the goods and services tax, implementation of house rent allowance under the 7th pay commission and fading of favourable base effect, among others. On 2 August, the panel chose to cut the repurchase rate—the rate at which the central bank infuses liquidity in the banking system—by 25 basis points to 6%. One basis point is one-hundredth of a percentage point. Pami Dua, professor at the Delhi School of Economics, wrote that her analysis showed “a fading economic growth outlook, as …

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

Differential Tax Levy under GST: Food Firms May De-Register Trademarks

Differential Tax Levy under GST:Food Firms May De-Register Trademarks The government’s decision to charge an enhanced tax rate on trademark food brands is leading several rice, wheat and cereal manufacturers to consider de-registering their product trademarks. Irked by the June 28 central government notification fixing a 5 per cent goods and services tax (GST) rate on food items packaged in unit containers and bearing registered brand names, the industry has made several representations to the government to reconsider the differential tax levy, which these players say is creating an unlevel playing field within these highly-competitive and low-margin industries. Sources say that the move has affected the packaged rice industry the hardest and allowed the un-registered market leaders, India Gate and Daawat, to gain advantage as compared to other registered brands such as Kohinoor and Lal Qilla. Smaller players are even more worried with this enhanced rate of tax (against the otherwise …