India jumped 14 spots in the World Bank’s ‘Ease of Doing Business’ 2020 rankings report released on Thursday (October 24). From the 77th rank last year, it jumped 14 places to the 63rd position among 190 countries, thereby becoming one of the world’s top 10 most improved countries for the third consecutive time.
How India Boosted Its Ease Of Doing Business Ranking In 2019
The three main areas in which India showed improvement, according to the Washington-based organisation, were:
- Reduced cost of starting a business: The World Bank said starting a business [in India] is less costly thanks to abolished filing fees for the SPICe company incorporation form, electronic memorandum of association and articles of association.
- Better access to building permits: “Obtaining all permits and authorizations to build a warehouse now costs 4% of the warehouse value, down from 5.7% the previous year. In addition, authorities enhanced building quality control in Delhi by strengthening professional certification requirements,” said the bank. It added that importing and exporting also became easier for companies with the creation of a single electronic platform, upgrades to port infrastructure and improvements to electronic submission of documents.
- Electronic submission of documents for import and export audits: “India made trading across borders easier by enabling post-clearance audits, integrating trade stakeholders in a single electronic platform, upgrading port infrastructures, and enhancing the electronic submission of documents. This reform applies to both Delhi and Mumbai,” the Ease Of Doing Business report added
Is The New Ranking Likely To Drive More Investments?
According to Inc42 report, post-2017 India has seen an overall downfall in the investment activity of Indian startups. This can be ascertained from the fact that two crucial indicators of startup economy — the number of funding deals and count of unique startups funded, both witnessed a downfall of 18% and 22% respectively.
“On the macro level, a slow down in the investment activity of the Indian startup ecosystem is also evident by looking at compounded annual growth rate (CAGR) of the mentioned indicators. Taking 2015 as the base year both the deal count and the number of unique startups funded are diminishing at the rate of 6% and 7% respectively,” the WB Ease Of Doing Business report added.
Rise in the rankings can help India lure MNCs and foreign investors looking at alternatives to China for investment because of Beijing’s trade war with the US.
However, according to the annual Global Competitiveness Index compiled by WEF, released this month, India has slipped 10 spots to rank 68 while many other economies in the world went up the ladder.
The reasons cited were improvements in economic and business activities in several countries. The WEF report also said that India was among the worst-performing BRICS nations along with Brazil, which has ranked 71 this time. Last year India was ranked 58th in the annual index.