New Delhi - With India climbing over 30 places in just a few years in the World Bank's "Ease of Doing Business" global rankings, getting into the league of top 50 countries is a distinct possibility over the short term, Finance Minister Arun Jaitley said on Tuesday.
"We jumped over 30 places in three years, and as Prime Minister Narendra Modi had said about setting a target to get among the top 50... I believe it is eminently doable," Jaitley told reporters here following the release of World Bank Group's latest report "Doing Business 2018: Reforming to Create Jobs".
"In 2014, we were ranked 142, and in the last two years India has gone from 131 to 130," he said.
India for the first time has moved into the top 100 in the World Bank rankings from its 130th position last year, riding on sustained government reforms which include making tax paying easier, according to the report.
"This is the highest jump any country has made in the ease of doing business rankings and is significant for India for our efforts on the 10 rankings' criteria," Jaitley said.
"These 10 parameters are so tough that you don't get credit for the reforms introduced till you actually see their results on the ground," he said, adding that the World Bank's cut-off date for considering performance is June of every year.
"It clearly shows India getting into a different league. Reforms have a gestation period of about three years before the impact is felt," he said, adding that the credit of GST implementation is also likely to impact India's ease of doing business in the coming year.
The report recognises India as one of the top 10 improvers in this year's assessment, though the report does not take into account the Goods and Services Tax (GST) rolled out on July 1.
"In coming years, substantial jump is further expected. Work is in progress. Enforcement of contracts is one area where improvement is expected. Starting a new business is also not factored in fully and in the future it will get factored in. In 3-4 areas, work is in progress... I believe, India in top 50 is doable. We will be pushing it with greater force," Jaitley said.
Listing the areas which had boosted India's ranking, Jaitley said that on "protection of minority investors" India had come up to fourth place on account of reforms like bringing in the Companies Act and setting up of the National Company Law Tribunal (NCLT).
"The biggest jump comes in the area of taxation reforms where we were ranked 172 last year and have moved up 53 places to be at 119 this year," Jaitley said, adding that India can hope to get credit for GST in the rankings for "subsequent years".
"India made paying of taxes easier by requiring that payments are made electronically to the Employees Provident Fund and introducing a set of administrative measures for easing compliance with corporate income tax," the report said.
"India, with eight reforms, was one of this year's top 10 improvers worldwide and the leading regional performer. This is the first year that India is in the top 100 economies globally," it added.
The Finance Minister noted that both on "ease of getting credit" and "electricity connections" India has come up to the 29th position this year.
"On resolving insolvency, we were 136... then we brought in the Bankruptcy Code and now we have climbed 33 places to 103rd position," he said.
While there has been substantial progress, India still lags in areas such as starting a business, enforcing contracts and dealing with construction permits, where there is a lot of work in progress that would help improve rankings further, according to him.
"India has moved to 100th position as a result of a number of reforms by the government. India is moving ahead in absolute ranking as well," Annette Dixon, Vice President, South Asia region, World Bank, told reporters earlier in the day.
Congratulating the government on the milestone shift in doing business rankings, Confederation of Indian Industry (CII) President Shobana Kamineni said: "This imparts a huge fillip to investors that the reform process is on track and would continue to be addressed intensively. The government has strategically addressed choke points of the business ecosystem in a mission mode to improve India's rank and break into the list of top reforming nations."
Associated Chambers of Commerce and Industry of India (Assocham) Secretary General D.S. Rawat said: "What is more heartening is the commitment of the government to take India among the first top 50 in the near future. While the government has made progress in areas such online taxation regime and insolvency law along with other sectors, further commitment to push for easing business rules along with the states and local bodies is quite refreshing."
Anil Khaitan, President, PHD Chamber of Commerce and Industry (PHDCCI), said the improvement in the eight parameters is tremendous as reforms across the board have resulted in fruitful outcome in the starting a business, dealing with construction permits, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
"Going ahead, we look forward for further improvement in the ease of doing business as the GST is not factored in as the cut-off date for Ease of Doing Business Ranking 2018 was June 2017," he added.
Nilaya Varma, Partner and COO - Infrastructure, Government and Healthcare (IGH), KPMG in India, said: "The next paradigm shift to top 50 is still a long way ahead and will require India to maintain a strong momentum. The GST reform that did not get considered this year will drive India's improvement in next year's assessment. But there is a need to continue to work on other areas including starting a businesses, trading across borders as well as land reforms."
"The policy effort that has contributed to this has been broad-based and encompasses a range of areas including taxation, finance, legal and administrative procedures. With GST, the government has laid the foundation for a more efficient indirect tax system," said Pankaj Patel, President, Federation of Indian Chambers of Commerce and Industry (Ficci).
The responsibility for making it easier to do business in India is that of both central and state governments and reforms at the state level have become even more important, added Patel.
Manish B. Agarwal, Partner and Leader, Infrastructure, PwC India said: "The improved investment climate will give an impetus to several economic corridors that are ready for investors."