India climbed 14 rungs in the World Bank’s Ease of Doing Business 2020 survey to stand at 63, among 190 countries, making it the one of world’s top 10 most improved countries for the third consecutive time.
The sharp rise in the ranking underscores the reformist credentials of the Narendra Modi-led National Democratic Alliance (NDA) government and may help the country lure multinational companies, looking at alternatives to China for investment amid Beijing’s trade war with the US.
Last year, India jumped 23 places to reach 77th position. In five years of the Modi government, India’s ranking has improved 79 places - to 63 in 2019 from 142 in 2014 - a record for a major economy.
The World Bank said India conducted four reforms in the 12-month period to May 1. “Among other improvements, India made the process of obtaining a building permit more efficient. Obtaining all permits and authorizations to build a warehouse now costs 4% of the warehouse value, down from 5.7% the previous year. In addition, authorities enhanced building quality control in Delhi by strengthening professional certification requirements. Importing and exporting also became easier for companies with the creation of a single electronic platform for trade stakeholders, upgrades to port infrastructure and improvements to electronic submission of documents," it added.
India saw the biggest jump in ranking in “resolving insolvency" category, to 52nd rank from 108th, on the back of implementation of the Insolvency and Bankruptcy Code, while its ranking improved substantially in Dealing with Construction Permits (to 27th from 52nd) and “Trading across Borders" (to 68th from 80th).
“Despite some challenges in the implementation of the reform—particularly regarding court operations and the application of the law by multiple stakeholders—the number of reorganizations in India has been gradually increasing. As a result, reorganization has become the most likely procedure for viable companies as measured by Doing Business, increasing the overall recovery rate from 27 to 72 cents on the dollar," the World Bank said.
Compared with last year, India’s ranking deteriorated on two parameters -- “protecting minority investors" (from 7th to 13th position) and “getting electricity" (from 22nd to 25th) -- and remained unchanged in “enforcing contracts" at 163rd. In all the three parameters, India’s score remained unchanged indicating no reforms were recorded by the World Bank.
India’s ranking improved in “Registering Property" to 154th rank from 166th despite a drop in score.
The Global Competitiveness Index, 2019, released by the World Economic Forum (WEF) earlier this month showed that India slipped a sharp 10 notches to 68. India’s score fell in eight of 12 parameters while other countries improved their domestic business environment faster than India. Iran (99) was the only other country of the 141 countries surveyed whose ranking also fell by 10 positions.