India disappointed at low rank in WB's Doing Business report

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SME Times News Bureau | 27 Oct, 2016
Reacting to India's rank remaining unchanged in the latest World Bank Doing Business report, the Indian government said on Wednesday that reforms undertaken by it and the states have not been adequately captured in the rankings released.

"I am a bit disappointed. Not only the Government of India, but every state is so actively engaged and wants to ease the situation. But for whatever reason, it has not been adequately captured in the ranking," Commerce Minister Nirmala Sitharaman told reporters in New Delhi on Wednesday.

"Collectively, Team India has been doing quite a lot of work," she said.

India's rank remained unchanged vis-a-vis last year's original ranking of 130 among the 190 economies assessed on various parameters in the World Bank's Doing Business 2017 report released on Tuesday.

With last year's ranking, however, being revised to 131, India has, effectively, improved its place by one spot for 2017.

"It gives me the message that we have to be even more focused now and even speedier in doing ahead what we are doing," Sitharaman added.

The minister also said that certain reforms like setting up of commercial courts may not have gone into the World Bank's systems as these happened on different dates and states.

"Some of the steps do take time, so the trickle-down effect of certain reforms have taken their due time because India is a large country," she said.

"While I am not really discouraged, it is disappointing. This is at a time when you want everything to reflect the various measures that the Centre and states are taking should impact the ranking system," she added.

India, thus, continues to rank 130th, recording little or no improvement in dealing with construction permits, getting credit, among other parameters.

To a question on whether Prime Minister Narendra Modi's goal of achieving an ease of doing business rank of less than 50 is attainable in the next one year, Sitharaman said: "That is a goal that we will be working to achieve."

"I will work with the states to ensure that we move rapidly in such a way that we are able to reach the Prime Minister's desired goal."

"Now, it is important for us to interact with states even more to quickly identify many such things which are important so that its impact is visible at the ground level," the minister added.

Meanwhile, the Confederation of Indian Industry (CII) said in a statement here that the World Bank rankings are "incompletely reflective" of the changes in India's business environment.

"The World Bank's Ease of Doing Business rankings are incompletely reflective of the significant transformation in the overall business environment in key areas such as openness to FDI, online procedures, MSME facilitation and so on," said Director General Chandrajit Banerjee.

"CII has been closely working with the World Bank on Ease of Doing Business, and we have noted significant progress across most state governments," the statement said.

Industry body Assocham said though the government has made several path breaking changes in legal framework and policy prescriptions, the impact on the ground is generally visible after a lag.

"Maybe, that could be the reason for India not being moved up dramatically on the World Bank's ease of doing business," Assocham said in a statement.

CII felt that certain reforms such as legislations of the Goods and Services Tax (GST), the Insolvency and Bankruptcy Code, and others may not have come within the World Bank's deadline of June 1.

While appreciating the importance in Ease of Doing Business to the rank of 130 by the World Bank, Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry said that lot of things at the ground level are becoming visible and the business community is enthusiastic to enhance its growth trajectory going forward.

India is now ranked at 130th among 190 economies by the World Bank.

Implementation of the Insolvency and Bankruptcy code would improve the ranking further. It is also expected that the goods and services tax will help make significant improvement in India’s ranking next year, he said.

Going ahead, President, PHD Chamber, Dr. Mahesh Gupta suggested that the Government must focus on the reforms in labour laws and decriminalization of businesses as stringent labour laws are a major roadblock to enhance production possibility frontiers and employment generation in the economy.