World Bank’s ease of doing business rankings: India leapfrogged to rank 77th

By
142

  • Share on
blurred-background-business-close-up-936137

India’s ranking in the World Bank’s Ease of Doing Business Index has recently made an upsurge of 23 positions from 100 in 2017 to 77 this year, which is quite a phenomenal leap we must say. This elevation in the country’s position can be ascribed to a major upgradation in six out of ten parameters.

Reminiscing the last two ranking schedules, it can clearly be seen that India is a forerunner in improving its rank for the second straight year with respect to ease of doing business in the country. There has been a remarkable improvement in certain significant parameters which includes ease of starting a business, construction permits, getting electricity, availing credits, payment of taxes, trade across borders, enforcing contracts and resolving insolvency. In the wake of such progression, the country has been featured amongst the top ten countries to have demonstrated a marked improvement for the second consecutive year. “India’s 23-place progression to the 77th spot in the World Bank’s ‘Ease of Doing Business’ index is a testament to the government’s positive policy efforts and focused reform trajectory.  We expect that it will catalyse business-focused industrial infrastructure and investment growth, and fuel job creation”, says Sangeeta Prasad, Managing Director & CEO, Mahindra Lifespace Developers Ltd.

The table below provides a clear comparison between the rankings during the last two years.

Indicator

2017 Ranking

2018 Ranking

Improvement

Construction Permits

181

52

129

Trade across Borders

146

80

66

Commencing a business

156

137

19

Availing credit

29

22

7

Getting electricity

29

24

5

Enforcing contracts

164

163

1

Overall rankings

100

77

23

 

What worked for India?

A mere fragmentation on the timelines for granting the requisite permissions has helped tremendously in easing the process of commencement of a new business. This historic jump can, therefore, be said to be a testament to the multi-sectoral reforms instituted throughout the nation, indicating that the nation is continually and steadily shifting towards global standards.

Here are some of the measures that have worked incredibly well for the nation:

  • Integration of multiple application forms into a single incorporation form
  • Replacement of Value Added Tax (VAT) with Goods and Services Tax (GST)
  • Reduction in corporate income tax rate and employees provident funds scheme rate paid by the employer
  • Replacement of a plethora of indirect taxes with a single direct tax
  • A significant reduction in the time and cost required for the import and export of goods. The initiatives include the implementation of electronic sealing of containers, amelioration of the port infrastructure, electronic submission of supporting documents and many others
  • Streamlining the process of building permit, and
  • Introducing a better insolvency framework in the system for debt recoveries

Jaxay Shah, the President of CREDAI National, in this regard, shares, “We acknowledge the on-going efforts of the Indian Government to tackle the pressing administrative roadblocks in the Indian real estate sector. This has been exhibited in rankings that have shown an improvement by 129 ranks in ‘Dealing with Construction Permits’ in the World Bank’s ‘Ease of Doing Business’ report. We, at CREDAI, however, believe that there is still a long way to go in order to maintain this momentum.”

As far as the real estate is concerned, the Government has already stiffened the overall sector with key reforms. The introduction of Real Estate (Regulation and Development), Act, 2016 and GST has definitely helped to augment investments in real estate. As per Manju Yagnik, Vice Chairperson, Nahar Group, “The market is now seeing slow signs of revival with infrastructure developments as well as investments being done by actual end-users. Moreover, the NRIs are also looking to invest money in the sector, which reflects an enhanced confidence in the buyers.”

The infused transparency and information symmetry due to such reforms, in turn, has marked an improvement in the ease of doing business rankings in the real estate sector. But, despite all the measures, there still remains a lot more to be done in this sector.

However, steadily making its way towards embracing the international best practices, India’s leap of 23 ranks amidst 190 countries, can indeed be declared as a rare feat for any country.

Here is what some of our other experts have to say:

“The real estate industry has been amongst the top beneficiaries of the government’s effort to improve the ease of doing business. While the overall performance has improved to 77th spot, ranking in ease of obtaining construction permits has improved a phenomenal 129 positions from rank 181 to 52 in a single year. A variety of other structural reforms which may not be reflected in the rankings like Benami Properties Act, affordable housing initiatives, RERA, REITs and GST have brought a paradigm shift in the industrial structure, thus, increasing transparency and making the industry organised. Such sustained efforts will go a long way in attracting global capital and the impact of the reforms is already visible in the alacrity with which global investors like Blackstone, CPPIB, GIC, Brookfield and Xander to name a few are participating in Indian real estate market. In the backdrop of this improvement in rankings, we expect the participation of global investors to strengthen further in the years to come.”

Shishir Baijal,
Chairman and Managing Director, Knight Frank India

 

“The improvement in the ease of doing business ranking is a positive sign for the Indian economy, which continues to progress. The growth comes on the back of constructive reforms like successful implementation of GST, relaxed and streamlined construction permits, ease in starting a business and trading across borders. The improved ranking will help boost investors’ confidence and will be a step forward in ushering the positive momentum in the coming year.”

Anshuman Magazine,
Chairman, India & South-East Asia, CBRE

 

“From a real estate perspective, we have seen "ease of doing business" translate into quicker turnaround and less number of permissions and clearances. Over the past couple of years, things have steadily improved, and we hope that going into the future, things will get better.

To quantify, if earlier it was 120-odd permissions and clearances required for a real estate project, now it is around 55. This is a huge improvement, but it can be bettered.

Some aspects like tree cutting, environment clearance, civil aviation height restrictions and high-rise committee tend to still take very long, these would be areas where the powers-that-be can try and speed things up."

Niranjan Hiranandani,
President (National) NAREDCO

 

“The real estate market, since the last one and a half months, has been facing a negative sentiment with the crashing of IIFLS, DHLF, Indiabulls stocks.  Home loans of several developers got delayed and customers wondered if mortgage companies would support home loans. The ranking has come as a sentiment booster where people have understood that the Indian economy is in control.  80 percent of the people are banking on home loans and this ranking has given confidence to the customers. The parameters that have been mentioned about the permits, for eg. the construction permits will go higher, availability of power, electricity will go up and in terms of enforceability of documents and contracts, resolving of insolvency: these are all positive measures which are encouraging the entrepreneurs to take up any kind of establishment.  We think this is a good move that the government is trying to come back in force. It is a more towards theoretical terms as of now but with the implementation of DP, the environment norms have been changed from 20,000 sq m to  50,000 sq m. The safety and fire norms have become clearer and well versed. Overall, we feel that the things are being headed towards a better macro-environment.”

Parth Mehta
Managing Director, Paradigm Realty

  • Share on
Rate it 1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...Loading...
  • Post a New Comment

Usage of 99acres.com to upload content which enables targeting by religion/community/caste/race is prohibited. Please report inappropriate content by writing to us at report abuse
Home Legal Sitemap Send Feedback
Back To Top