Independent India has had no history of bringing about transformational changes according to a well-crafted policy initiative and persistent action. India’s surge in the latest World Bank report on Ease of Doing Business thus becomes remarkable as a significant change in our record of performance as an independent nation.
The rise from being ranked 130th to first 100 in the overall ranking of 196 countries is a feat no nation has achieved and given the fact that we were at 142nd level in 2014 signifies the clarity and ambitiousness of the vision the Modi government crafted for itself to break in to the top 50 countries and the persistent path-breaking efforts taken in the last three years in the journey towards achieving this.
Resolving insolvency, paying taxes, access to credit and protecting minority interests are the four parameters where the jump in ranking saw great quantum leaps, thanks to difficult legislative measures and never seen before policy actions in taking credit availability to the nook and corner of India. The fact that the greatest tax reform the country has seen in the introduction of Goods and Services Tax (GST) has not been captured in the ranking exercise has embedded in the system a potential for significant rise in the ranking in the coming years.
The most significant fall out of the rise in ranking is the all round reinforcement of our belief in ourselves as a nation and that with political will and societal support the dream of building a new India by 2022 is a doable feat.
The journey towards entering the first 50 rank list is a difficult and tortuous course. In the starting of business segment our rank has sunk to 156 (we were 155 last year) and by public perception the most reprehensible ground reality here in the absence of clarify is policy frame work and legendary bureaucratic delay. Further, enforcement of contracts now takes longer than it did 15 years ago. The crying need of the hour is the total revamp of the judicial processes together with procedural reforms that reach the hinterland of the country. In subjects like land acquisition, comprehensive legislative action is called for. Simply put, more difficult reforms lie ahead.
But what is significant is that there is a public discourse that all these reforms are doable and the Government of India has already lined up 90 reforms for various ministries to jump to the first 50 in the ranking. Seven ministries will implement these reforms with the focus on reducing the number of processes and moving them online with 22 reforms in the construction permit space and 14 in registering property. There are 122 reforms already at various stages of implementation which have not entered the ranking exercise. Mission Top 50 thus is a doable feat and that spreads cheer in the mind of every patriotic Indian.
Indian stock markets saluted the rise in ranking by making Indian stocks the most expensive in the world. Notwithstanding this, overseas funds are turning bullish on India. Indian rupee is on the road to becoming the best performing Asian currency. It gained 15 paise to close at 64.60, following publication of the report, to a dollar. The prognosis is that this prepares the ground for more foreign direct investments to flow in to India.
The country’s corporate law and securities regulation were recognised as highly advanced, placing it in the fourth place in global ranking, protecting minority interests.
The opening of small fin-ance banks and payment banks together with aggr-essive action through MUDRA loans in the small and micro enterprises segments has redrawn the credit availability space leading to improvement in the ranking. Landmark legislations in resolving insolvency and bankruptcy, simplification in the payment of statutory dues like Provident Fund contributions and corporate taxes are captured in relative improvement in the ranking.
That such a phenomenal change in the world perception of the country has led to political skirmishes over the credibility of the report is unfortunate. The state government rankings of ‘Ease of Doing Business’ has concurrently introduced an all pervasive urge in state governments to initiate legislative and administrative reforms to move up in the ranking and become attractive investment destinations. The World Bank report has thus injected a verve into the Indian polity and shaping a new India by 2022 is bound to become a national passion.
