There is a considerable room to improve the business environment in India and boost the corporate investments through measures like lowering of costs and better financial access, an IMF Working Paper has said.
Noting that the corporate investments have slumped to 10 per cent of the national economy from 14 per cent prior to the global financial crisis, the IMF Paper has said that the corporate profitability could also be given a boost through measures like economic reforms and lowering of business costs.
“Cutting various costs of doing business and improving financial access” can help in providing the boost to corporate investments and the country has considerable room to improve its business environment, it noted.
The views expressed in an IMF Working paper do not necessarily represent those of the multilateral lender.
“Before the global financial crisis, strong corporate investment was behind the increase in investment... Since 2009, however, corporate investment has slowed sharply to 10 per cent of GDP from 14 per cent before the crisis,” it said.
Last year, India was placed at the 132nd position among 183 countries in terms of ease of doing business. Even though the ranking was better than in 2010 (139th spot), it reflected relatively high costs of doing business.
According to the report, high and volatile inflation and heightened global uncertainty might have dampened corporate investment.