A number of newspapers have covered on improved rankings of India on Ease of Doing Business from 134 in 2015 to 130 in 2016 rankings released by World Bank every year. The impetus to this improved ranking could be attributed to Modi’s dream of India being in top 30 countries in ease of doing business and therefore creating an environment favourable for increased private sector activity. The elimination of paid-in minimum capital requirement allowed for more private players to set their foot in Indian market even with low financial backing. The number of procedures for starting a business have been reduced which used to be an additional impediment in the mind of an entrepreneur or a start up. Another aspect that plays a vital role in a start-up is getting the electricity, which is one of the ranking parameters covered in survey released by World Bank where India’s rank has improved to 70 in 2016 from 99 in 2015 and the number of procedures to get the connection has reduced to 5 from 7 in respective years.
The improvement is appreciable but it needs to improve upon its policies domestically and internationally. In the domestic context, India still needs to improve upon parameters like: Registering the Property, for which the time limit has not reduced; Getting Credit, which has become tough and India’s rank has degraded to 42 from last year at 36. It fairs even worse in terms of paying taxes and enforcing contracts where it ranks at 157 and 178 out of 189 countries respectively. NDA government has been pushing “Make in India” initiative and Prime minister of India has visited a number of countries to improve trade across borders. India’s ranking in Trading across Bordersstill remain the same at 133 compared to last year, which reflects that less has been done to improve upon increasing trade across the borders and the fact that we have not witnessed any of great investments committed by a number of countries on the ground.
To conclude, the significant improvement in ranking is a big achievement for a large economy like India and is an indication that favourable policieshave at last started moving things in the right direction. However, for a growing economy like India, the main challenge is to continue this progress in ranking in a sustained manner. To ensure the dual task of sustaining the achieved progress and tapping the full potential of all the states, a certain degree of determination of policy makers and authorities are required toprevent any kind ofpossible derailing from the improvement trajectory. Only then can we jump 40 places and achieve the dream of breaking into the list of top 100 next year.