Ease of business: New insolvency rules, tax norms lift India 30 ranks to top 100

Mangalore Today News Network

New Delhi, Nov 01, 2017 : Boosted by substantive jumps in the areas of protecting minority investors through tightening of securities regulations, improvement in rules related to businesses paying taxes and access to getting credit and resolving insolvency, India surged up 30 places to the 100th rank among 190 countries in the latest edition of the World Bank’s global rankings on Ease of Doing Business.

 

 

According to the Bank’s Ease of Doing Business 2018 report, India figures among the top 10 countries that have marked an improvement this year moving up in rankings of six out of 10 “Doing Business” indicators.

Last year, India gained one slot in the World Bank’s rankings, from 131 to 130. While acknowledging the “substantial progress” in rankings, the report shows that India still lags in areas such as starting a business (156), enforcement of contracts (164), dealing with construction permits (181) and registering property (154).

The World Bank report said the improvement in ranking for India has come on the back of “sustained business reforms” over the last four years.


Hailing the new ranking, Prime Minister Narendra Modi tweeted that the “historic junp” is a testament to the “multi-sectoral reform push of Team India.” He added: “India welcomes the world to explore economic opportunities our nation has to offer…Guided by the mantra of ‘Reform, Perform & Transform,’ we are determined to further improve our rankings and scale greater economic growth.”

The new indirect tax regime of Goods and Services Tax was, however, not a part of the report as the cut-off date for incorporating the reforms was June 1 and so it will be part of the evaluation process from next year.

Demonetisation was also not reflected in the report as it was not comparable across countries being a one-time event, the World Bank said.

Union Finance Minister Arun Jaitley said the work done for protecting minority investors through changes in the Companies Act and facility of National Company Law Tribunal (NCLT) helped India move up to the 4th ranking among the 190 countries, while “online system for tax payments, filing returns and assessments” helped the country to move up 53 places to ranking of 119 for ‘paying taxes’.

“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.

Jaitley added that for the remaining three to fout areas which are lagging behind, a lot of work is being done so that India jumps up from its 100th ranking.

“Work is in progress and I think if we are able to expedite the work over the next few months in these areas, there is a huge scope for us to now jump up from this position number 100,” he said.

He added that “there is reason to believe that we have the capacity to further significantly improve our position” and the target of making it to top 50 in rankings is “doable”, as targeted by Prime Minister Modi. “In the very first year (of NDA government), Prime Minister had said that our target should be to take India in first 50. I believe this is doable,” he said.

“We are seriously taking up these issues where we are still lagging behind so that these are the areas in which a 20-30 point improvement in the next one to two years is reasonably possible,” he added.

According to the report, time taken to enforce contract is longer today at 1,445 days than it was 15 years ago (1,420 days). In starting a business, India has reduced the time needed to register a new business to 30 days now, from 127 days 15 years ago.

“However, the number of procedures is still cumbersome for local entrepreneurs who still need to go through 12 procedures to start a business in Mumbai, which is considerably more than in high-income economies, where it takes five procedures on average,” the report said.



courtesy:Indain Express