GST is key to Modi’s plan: World Bank

In 2015, India has jumped 12 places to rank 130 out of 189 countries in the World Bank’s ease of doing business report as a result of various business-friendly steps taken by the Narendra Modi government. Last year, India was at 142nd rank.

Mr Modi aims to catapult India to be among top 50 countries on the ease of doing business.

According to World Bank chief economist and senior vice-president, Kaushik Basu, “It is not impossible for India to be in top 100 ranking of ease of doing business report next year, if it continues with its set of planned economic reforms, including the crucial GST and cuts down on the bureaucratic cost of doing business.”

“There are countries which have moved 30-40 places at one go, but usually these are small countries. For a big economy like India, it is difficult, but from what we have seen thus far, it is not impossible,” Dr Basu said.

While thanking the World Bank for recognising the improvements in India, finance minister Arun Jaitley said the current ranking does not fully reflect the reforms initiated and the position will improve further next year. “I am grateful that the World Bank has recognised that India is now becoming an easier place to do business... I believe that this 12 point movement does not reflect the full pace of reforms that we have done,” he said.

Mr Jaitley said that a large number of steps which the BJP-led NDA government has already taken are going to be reflected in the rankings next year. “These rankings are only up to June 1 and some of those steps, whose impact is not seen on the ground, as yet have not been factored into this. But I am sure, in the years our ranking will certainly improve,” said the finance minister.

Mr Jaitley said that he believed India still has a long way to go and it is “work in progress” on improving the environment for doing business in the country. He said that in recent days, the government has taken a number of steps to further improve the ranking. “I am trying to make the Income Tax Act much simpler. Yesterday, I have announced a committee which will recast some of these provisions... There is still an area on enforcement of contracts, easier adjudication of disputes. So we have brought out an ordinance for a fast-track arbitration procedure,” he said.

This is part of the latest “Doing Business 2016” report of the World Bank that covers 189 economies and where India’s overall ranking for ease of doing business has remained low at 130th position, despite an improvement since the last year. The sub-ranking for protecting minority investors is topped by Singapore, New Zealand and Hong Kong jointly at the first position.