The Hindu Business Line : Business confidence rising in India

It is good news that India went up 12 notches in the World Bank’s latest edition of “Doing Business”, which ranks countries on the business parameters. The sharp surge in FDI flow into India during the first quarter of the fiscal year to $5.9 billion is also adding to the cup of joy.

It has been reported that India was the global top performer in 2006-07 on an important external indicator — ‘Trading across borders’. At the same time, however, India is not faring too well on such indicators as enforcing contracts, paying taxes and dealing with licences.

Important factors such as administrative and governance-related bottlenecks are playing havoc with these indicators.

Therefore, it is time for the administration to ease the process of paying taxes and providing licences. This will definitely help the informal sector to become better organised.

Further, the importance of enacting and putting in place a sound contract law cannot be neglected. Well-established contract law will certainly speed up the process of doing business and also prevent any disputes and delays in closing business deals.

Above all, the governments, both at the Centre and the States, should take the responsibility of improving the financial structure in the sector by announcing loans, sops and incentives to the Indian business community.

Senthil S. Durai e-mail