Overall business easiness: deleveraging and tax reforms allow India 23 to rank up to 77

Ministers Arun Jaitley and Suresh Prabhu discuss the ease of filing companies in New Delhi on Wednesday. (Photo: Anil Sharma)

INDIA gained 23 places out of 77 in 190 countries in the World Bank's "Ease of Doing Business" (EODB) ranking in 2019, largely driven by the improvement of areas such as "licensing processing". "cross-border trade", "credit" and "start a business".

However, compared to last year, India saw its ranking shift to various other parameters, such as "property registration", "minority investor protection", "tax payment" and "Insolvency resolution".

Last year, India won 30 places and was ranked 100th. In 2016, 2015 and 2014, India did not improve much and was ranked at 130, 131 and 134, respectively.

The report released on Wednesday indicates that India is one of the top ten most improved economies in at least three areas measured by the study, alongside countries such as Afghanistan, Djibouti, China, China, and China. Azerbaijan, Togo, Kenya, Cote d Ivoire, Turkey and Rwanda. .

India is the only other country, along with Djibouti, to be in the top 10 for the second year in a row. Delhi and Mumbai are the only cities covered in India by the report.

New Zealand tops the list of 190 countries, followed by Singapore, Denmark and Hong Kong. The United States ranks eighth, China 46th and Pakistan 136th.

In an official statement, the Ministry of Commerce and Industry said: "India has improved in six out of ten indicators and is close to international best practices … The improvements the most spectacular were recorded in the "building permit" and "cross-border trade" indicators.

At a press conference held after the release of the report, Finance Minister Arun Jaitley said that Prime Minister Narendra Modi had set himself the goal of being part of the top 50 and that It was likely that improvements would be made at the time of creating a business. contracts, pay taxes and implement insolvency laws.

The most significant improvement was found in the "processing of building permits", where the ranking improved from 181 to 52. This is because of the number of procedures from 30.1 to 17, 9, with a reduction in the number of days deal with building permits – at 94.8 days of 143.9 days last year. The cost of the permit, expressed as a percentage of the value of the warehouse, was also reduced to 5.4%, up from 23.2% a year ago.

Similarly, India has seen an improvement in the ranking of "cross-border trade" from 146 to 146 last year. This is also due to a noticeable reduction in time and cost of import and export, in terms of document compliance and borders.

Addressing the Indian Express, Ramesh Abhishek, Secretary of the Department of Industrial Policy and Promotion (DIPP), said, "We have launched this two-way communication process, during which we – DIPP and the other departments and agencies involved – communicate the reforms to the Commission. stakeholders and then get their feedback, whether it works or not. Then we correct our reforms, our online systems, our rules or anything else. So, this ongoing work is in progress. "

Noting that the two most populous economies – China and India – have presented "impressive reform programs," the World Bank said India also focused on streamlining business processes.

India has facilitated the creation of a business by integrating several application forms into one general form of incorporation. "India has also replaced the value-added tax with the GST (goods and services tax) for which the registration process is faster," the report says.

Declaring that a well-designed insolvency framework is an essential factor in debt collection, the report states that the creation of Indian debt collection tribunals "has reduced non-performing loans by 28 percent and lowered rates." of interest larger loans, thus suggesting faster processing of loans ". debt collection cases reduce the cost of credit. "

The World Bank observed that India facilitated the payment of taxes by replacing many indirect taxes with a single GST for the whole country, reinforced by the fact that the number of payments per year increased from 13 at 11.9, and total taxes and contribution rates – as a percentage of profits – increased from 55.3% to 52.1%.

However, the deterioration in the ranking of the "pay taxes" parameter from 119 in 2011 to 121 could be attributed to the 275.4 hours spent each year on the payment of taxes, which is more than 214 hours. last year. "India has facilitated the payment of taxes by replacing many indirect taxes with a single indirect tax, the GST, for the country as a whole. India has also reduced the cost of taxes by reducing the corporate income tax rate and employer-sponsored employee benefit rate, "the report said.

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