Prime Minister Narendra Modi has made it easier to do business in India, according to the World Bank, which showed the country moving up 30 places from last year’s ranking.
India ranked 100th out of 190 countries after it implemented reforms in most indicators, including starting a business, getting credit, paying taxes and resolving insolvency.
“It indicates India’s endeavor to further strengthen its position as a preferred place to do business globally,” Annette Dixon, World Bank vice-president for South Asia, said at a media conference in New Delhi.
India was ranked 142 during Modi’s first year in office in 2014. At that time the country was battling perceptions of excess red-tape and policy paralysis, leaving investors concerned about the $2 trillion economy. Modi, who won the 2014 elections on a pledge of improving ease of doing business, set a target to place India among top 50 and in the last two years has attracted record foreign direct investment.
India’s government is working hard to improve its performance on construction permits and in other areas, Finance Minister Arun Jaitley said at a news conference after the report was released. The country is likely to keep improving as the government deliberately targets areas examined by the World Bank report, he added.
“There is a huge scope for us to jump up from this position,” Jaitley said.
While there has been a substantial progress, India still lags in areas such as starting a business, enforcing contracts and dealing with construction permits, the World Bank said.
“Tackling these challenging reforms will be the key to India sustaining the momentum towards higher ranking,” said Junaid Ahmad, India Director for World Bank. “India’s focus on doing business at the state level may well be the platform that sustains the country’s reform trajectory for the future.”
The improvement in ranking comes even as India’s growth slowed to a three-year low of 5.7 percent in June quarter on the back of last November’s cash ban and a chaotic roll-out of nationwide sales tax in July. The World Bank rankings didn’t take into account impact of demonetization and the goods and services tax.
The “transitory” disruptive effects are over and India’s economic growth will see a “sizable turnaround” when September quarter numbers are out next month, Economic Affairs Secretary Subhash Garg said in an interview Oct. 30.