Ease of Doing Business: Modi asks officials to scope out improvement avenues

Prime Minister Narendra Modi on Wednesday asked top officials at the Centre and States to review the World Bank’s latest Report on Ease of Doing Business which had ranked the country at 130th place, out of 190 nations, and submit a report to the Centre in a month’s time on potential areas of improvement.

“The Prime Minister asked all Chief Secretaries and all Secretaries of the Government of India to study the report, and analyse the potential areas where there is scope for improvement in their respective departments and states,” said a release after the PRAGATI meeting.

The Prime Minister also asked for a report from all concerned in this regard, within a month, and asked the Cabinet Secretary to review it later.

Meanwhile, Commerce and Industry Minister Nirmala Sitharaman has expressed disappointment over the country’s ranking given by the World Bank in its Doing Business report.

The Minister said “Team India” has been doing a lot of work and the report does not adequately capture them.

“Not only the government of India, but every State is actively engaged and wants to ease the situation… While I am not really discouraged, it is disappointing,” Sitharaman said.

Despite the government’s efforts to push up India’s rankings to the top 50 in the ease of doing business, its position has improved by just one notch in the latest edition of the World Bank’s Doing Business report.

India was placed at 130 amongst 190 counties in the report in 2017, just one slot higher than the revised rank for 2016.

Sitharaman said the report may not have taken into account reforms such as setting up of commercial courts, which may not have gone into the systems of the World Bank as it has happened on different dates and States. Stressing that the target of reaching the top 50 countries on the report is still intact, the Minister said the government would continue with reforms to improve the ease of doing business in the country — a key consideration for foreign investors.

“The ranking gives me the message that we have to be even more focused now and even speedier in doing ahead what we are doing,” she said

Ministry officials also pointed out that many of the reforms will have long-term impact.

“We are doing more than what the World Bank has stipulated on reforms. We have taken an integrated approach after studying global best practices,” said Shailendra Singh, Joint Secretary, Department of Industrial Policy and Promotion.

India Inc also jumped to the government’s defence and said reforms such as the passage of the Insolvency Code and the Constitution Amendment Act for the Goods and Services Tax were not factored in as they were passed after the report’s cut-off date of June 1.

“The Doing Business report … measures the investment climate only in Delhi and Mumbai. Many reforms that have taken place with the monitoring of DIPP at the state level are not considered and do not reflect in the country wise ranking,” said CII President Naushad Forbes, adding that there have been significant changes on the ground to improve ease of doing business.

Noting that the investment climate has improved and led to increased foreign capital inflows due to wide ranging reforms, Harshavardhan Neotia, President, FICCI, however, said that States need to deepen their efforts in specific areas for improving the rankings further.

“A regular feedback mechanism as suggested by the Government to implement the reforms shall help in achieving results faster and FICCI would be happy to support government in this regard,” he said.

Finance Minister Arun Jaitley too had earlier noted that India’s ratings on the Ease of Doing Business report may improve only next year as reforms including the passage of the Insolvency and Bankruptcy Code and the Constitution Amendment Bill for GST were undertaken after its cut-off date.

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