The Narendra Modi government's attempts to improve the ease of doing business has yielded good result, with the country jumping 12 ranks to 130 in the latest ranking compiled by the World Bank. India was ranked 142 in the ranking for 2015.
Singapore has topped the ranking again. India's distance to frontier (DTF) score used to compile the rankings improved to 54.68 in 2016 from 53.97 in 2015. The cut-off date for the ranking was June 1, implying that the improvement has been achieved in a short span on one year of this government taking over. In 2015 ranking, the last one of UPA government, India had slipped a few notches to 142.
The World Bank report says India is one of the countries that have made the most improvement, capturing the initiative of the government in a separate section. “India is the South Asian economy recording the biggest increase in the distance to frontier score since 2004,“ the report said taking note of the fact that the country has cut down days take to start business.
The biggest improvement was in the Getting Electricity“ sub component with India's rank jumping to 70 in 2016 from 137 the year before in the 139 country ranking. The NDA government has set itself target of breaking into top 50 in this ranking.
“In 2014, the government of India launched an ambitious programme of regulatory reform aimed at making it easier to do business. Spanning a range of areas measured by Doing Business, the programme represents a great deal of effort to create a more business friendly environment, particularly in Delhi and Mumbai,“ the report said appreciating the effort but cautioned results will take time.
“Fostering an environment more supportive of private sector activity will take time. But if the efforts are sustained over the next several years, they could lead to substantial benefits for Indian entrepreneurs -along with potential gains in economic growth and job creation,“ the report noted.
The ranking is based on business environment in Delhi and Mumbai with 53 and 47 respective weight for these cities. The report noted India made starting a business easier by eliminating the minimum capital requirement and the need to obtain a certificate to commence business operations. Several other initiatives were going on June 1, the cut off date for this year's data collection, the report noted.