Min of Commerce, World Bank discuss ease of doing business rankings
The Dollar Business Bureau
The Ministry of Commerce had discussions with the officials of the World Bank in Washington, conveying its concerns over the methodology used by the Bank in ranking countries in terms of ease of doing business. The index rates the top economies among 189 countries.
The commerce ministry was joined by officials from the Department of Industrial Policy and Promotion (DIPP) in its discussions. DIPP secretary Ramesh Abhishek shared in a tweet that the detailed interaction with the team in Washington DC resulted in creating better awareness about reforms in India.
"The Bank team also sensitized on various concerns on methodological and other issues. All departments/agencies made excellent presentations," Abhishek quipped in his tweet.
The annual ratings exercise has been a basis for investors to pump in fresh investments. India's performance in the ratings has been dismal compared to its immediate neighbors except Pakistan and Bangladesh. For instance, Sri-Lanka scored 107 while Nepal secured 99 and Bhutan clocked an impressive 71 in the annual rankings for 2016. Singapore, New Zealand and Denmark topped the rankings for 2016.
When the first report was out, the lack of including the provision of a bankruptcy code emerged as a hiccup. The World Bank report for 2004 noticed that it took less than six months for formalities of winding up a business in Japan while it took more than 10 years in the Indian and Brazilian markets. The first report of the World Bank in 2004 evaluated countries on the parameters of economic characteristics, procedures for starting a business, hiring and firing workers, enforcing contracts, getting credit and closing a business. The World Bank also found within the 2004 edition that India was the most improved country in South Asia.
Besides the meeting, the World Bank would also be considering India’s slew of reforms. For instance, in 2004 it took 127 days to start a business but in 2015 it took only 29 days to start a business. Some states such as Gujarat, Telangana and Maharashtra are working on reducing this gap further. Additionally, India has adopted a changed stance for 2017, and a higher ranking looks more opportune considering that dynamic reforms such as GST, a bankruptcy code and renewed emphasis on digital payments will sure add to the overall ease of doing business.