India, which jumped more than 50 spots in the ease of doing business ranking in just two years, has emerged as one of the top reformers, World Bank officials said Wednesday, but cautioned that entering the top 50 bracket is tough as the next set of reforms is difficult.
In the coming years, India could very well improve its ranking further given that the impact of some of the ongoing reforms has not been fully realised or captured yet, they said.
At the same time, they cautioned that entering the top 50 bracket a goal set by Prime Minister Narendra Modi in 2014 is a tough nut to crack, even though at this point of time, it no longer seems to be impossible for India.
"India is one of our top reformers, one of our top 10 performers. It was also on the top 10 list last year.. two years in a row, which is sometimes very difficult to do," Shanta Devarajan, the World Bank's Senior Director for Development Economics and Acting Chief Economist, told PTI in an interview.
"Being one of the top performers two years in a row is a rare event," Devarajan said as he praised Prime Minister Modi for taking personal interest in undertaking reforms and initiating measures aimed at improving the ease of doing business in India.
Devarajan's remarks came as the World Bank in its latest Doing Business 2019 report said that India has improved its ranking in ease of doing business from 131 two years ago and 100 last year to 77 this year.
Achieving a ranking of 77 from 131 in two years is a "considerable improvement" for India, said Rita Ramalho, Senior Manager of the World Bank's Global Indicators Group.
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But entering the top 50 ranking is very difficult, she said.
"Actually, it is much harder, the closer you get to number one ranking. The better the rank, the harder it is to improve," she said.
"But I was actually somewhat surprised of how the big the improvement this year it has been for India. So, you never know, India may be able to get it and get big enough improvement to reach the 50 ranking," Ramalho said.
Entering the top 50 ranking is a "reasonable" goal, Devarajan said, but noted that the next set of reforms is difficult and at times politically complicated.
As per the latest World Bank report, there are some areas where India is lagging far behind the global rankings, the officials pointed out. For instance, India is placed at 137th when it comes to starting a business. India takes 1,445 days on an average to resolve a commercial dispute. In high income economies, it is 582 days.
"This is something that has not changed. Probably one of the more challenging reforms in India is to get the judiciary on board to improve that part," Ramalho said.
India is also lagging behind when it comes to registration of properties where it is ranked 166 among 190 countries.
"So, I think those are probably the ones that are pulling India down (the ranking) and are probably harder to actually solve," Ramalho said. The average time to transfer properties in Mumbai is 80 days while in advanced countries the average time period is 20 days.
Ramalho said such massive improvement in India's ranking in few years means that for a domestic entrepreneur now it is easier, less cumbersome to do business.
Ramalho said the new ranking is reflective of the reform announced in the previous years, but was implemented last year like the Goods and Services Tax (GST).
"It's a multi-year reform process that we're seeing," she added.
"Part of the GST is counted in the report, but we would expect that they'll still be an improvement in their paying taxes indicator due to that. The full impact of the GST would only be felt next year," she said.