Indian Business: On an Upward Trend!

India grabbed the 77^th rank in the World Bank’s “Ease of doing Business” index which is quite a boost for the NDA government. India for the first time topped among the South Asian countries and stood third among the BRICS.

Now, what does the line “Ease of Doing Business” mean? According to the definition, it says – “it is an index published by the World Bank which is an aggregate figure that includes different parameters which define the ease of doing business in a country” [Source: https://bit.ly/2wqSDIt]. The parameters that are taken into consideration are construction permits, registration, getting credit, tax payment mechanisms etc. 

The NDA government has worked really hard and has managed to jump 53 notches in the last two years. India’s biggest gain was in construction permit where it jumped 129 ranks and has reached to 52^nd place. It is the first BRICS and South Asian country to be considered as placed in the position of top improver in two consecutive years. In 2014 India ranked 6^th among the South Asian countries and in 2018 it ranks first which in quite an achievement for the country and its people.  Besides India ranks among the top 25 countries in three parameters which are getting electricity, getting credit and protecting minority investors.

World Bank measures the “Ease of Doing Business” by a score that measures the gap of an economy to the global practice. This score is named as Distance to Frontier (DTF). India experienced an improvement in score from 60.76 last year to 67.23 this year.

Below is a table showing India’s improvement in rank in every parameter:

Source: https://bit.ly/2Q3vOCW

World Bank considers our economy as one of the top improvers for the year 2018. Some of the reforms that Indian government has implemented to achieve this rank are:

• India has started off with an online single window system for taking into account the construction permit cases.
• It has introduced deemed approvals to ease off the construction permits.
• It has decreased the cost of issuing and obtaining permits.
• Business sectors in India can now obtain new electricity connection in about 55 days which was around 105 days earlier.
• India has also introduced new Insolvency and Bankruptcy code for putting in a solution for insolvency.

Below is the table containing the ranks of BRICS nations in 2017 and 2018:

Source: https://bit.ly/2Di8yhP

Where can India improve for getting an even better rank next year?

On scrutinizing the parameters, India is lagging behind and doesn’t have a satisfactory score in “starting a business”, “enforcing contracts”, “registering property”, “paying taxes” and “resolving insolvency”.

India has amended the Commercial Courts Act, and there are commercial courts looking after the commercial issues in 250 districts. When these courts will dispose the cases faster, India can improve its rank. If also India can regulate the ownership and titles online it can again improve its rank by next year. [Source: https://bit.ly/2Di8yhP]

Now, as we know the parameters that are necessary for “Ease of doing Business”, improving on the parameters gets easier. We can also analyse the loopholes and rectify them. These are the indicators or the objectives for every economy who wants to provide a better and more conducive environment for business for its people.

Hence, we can conclude that the NDA government is clear with its objectives as far as the business sector of India is concerned.