India placed 130th from a revised rank of 131 last year, with the nation's 'ease of doing business' ranking improving in just two out of 10 parameters
New Delhi: India’s ranking in the World Bank’s annual Doing Business survey improved by just one notch to 130 in its 2017 report from a revised rank of 131 last year, highlighting a gap between policy measures and their implementation.
The World Bank lowered India’s ranking for last year to 131 from 130 announced last year. Out of 10 parameters, India’s ranking this year improved in two, remained unchanged in three and worsened in five. The government was expecting at least a 10-spot jump on the back of several ease of doing business measures taken in the past two years.
The World Bank, however, does not take into account government notifications of reforms, basing the rankings instead on field surveys and interviews with corporate lawyers and company executives.
Industry secretary Ramesh Abhishek, in charge of improving India’s doing business ranking, said the government will soon appoint an external agency and launch a portal for round-the-clock feedback from users on the policy steps launched by the government. “The observers will play a critical role in ensuring reforms are functioning as intended and that any roadblocks along the way are being addressed in a timely manner," he added.
The Bank acknowledged a possible gap. “The experience of implementing reforms based on doing business data has demonstrated to the government the significance of establishing clear stakeholder feedback mechanisms to close the gaps between policy formulation and implementation," it said.
It, however, recognized reforms by India in four areas: getting electricity, enforcing contracts, paying taxes and trading across borders.
Abhishek said this is the first time India’s absolute score, that measures the gap between India and the global best practice, has improved for two consecutive years—to 55.27 in 2017 from 53.93 last year. “Additionally, India’s distance to frontier score improved on 6 out of 10 indicators, showing India is increasingly progressing towards best practice," he added.
India made the sharpest jump in “getting electricity", with its rank jumping 44 spots to 26. “India made getting electricity faster and cheaper by streamlining the process of getting a new commercial electricity connection," the World Bank said.
India’s rank also improved in the “enforcing contracts" parameter by 6 spots to 172. “India made enforcing contracts easier by creating dedicated divisions to resolve commercial cases," the World Bank said.
Though India’s ranking in “paying taxes" deteriorated by 15 spots to 172, the World Bank said India made paying taxes easier by introducing an electronic system for paying employee state insurance contributions.
India’s ranking in “trading across borders" also fell by 10 spots to 143 though the World Bank recognized India’s reforms in making imports and exports easier through the launch of the ICEGATE portal and simplifying border and documentary procedures.
Abhishek said the World Bank has not recognized as many as 12 reform measures carried out by the government. “We will continue our engagement with the World Bank and address their concerns to include these reforms in next year’s doing business report," he added.
Abhishek said once the government implements the Insolvency and Bankruptcy Code by the year end and the goods and services tax (GST) comes into force by April next year, India’s ranking will significantly improve.