Ease of doing business: ‘sustained reforms can improve ranking further’

India has moved up in the World Bank’s ‘Doing Business’ ranking, marking a significant shift in trend after several years of decline.

The latest ‘Doing Business’ report ranked India at 130 out of 189 economies in the world, 12 positions higher than last year’s 142.

The improvement is, however, marginal when compared with the recalculated 2015 ranking of 134, based on a new methodology.

Rather than quibble over the quantum of improvement, the more important aspect that has to be understood is the “direction” of change and that things have only improved, say economy watchers and experts.

Onno Ruhl, World Bank Country Director in India, said that this year’s improvement in ranking marked a significant shift in trend after several years of decline.

“With sustained reforms, India can make significant improvement in its rankings in the next few years,” he said.

Countries such as Russia and Rwanda, which have witnessed dramatic improvements in their ranking in the past three-five years, started with more modest changes in the initial years, Ruhl said.

Russia, which improved its rank from 123 in 2011 to 51 in 2015, had moved just three places in the first year.

Speaking to a television channel, Finance Minister Arun Jaitley said he was “grateful” to the World Bank for recognising that India was now becoming an easier place to do business.

However, he noted that the 12-point movement did not fully reflect the full pace of reforms that the country had undertaken in the past year. He expressed confidence that India’s position in the World Bank’s ‘Doing Business’ ranking would improve further next year.

Chandrajit Banerjee, Director General, Confederation of Indian Industry, said the improvement is an “exceptional feat” given that large economies do not move more than 10 places in rankings in a year.

The improvement in India’s ranking shows that the government’s efforts in providing an enabling environment for growth has yielded results, said A Didar Singh, Secretary General, FICCI.