India's global ranking in terms of protection of minority investors has slipped three notches to 13th, but remains much higher than the country's overall 130th rank for ease of doing business.
The sub-ranking for protection of minority investors is topped jointly by New Zealand and Singapore.
Others that ranked higher than India are Hong Kong, Malaysia, Kazakhstan, the UK, Georgia, Canada, Norway, the UAE, Slovenia and Israel.
In the World Bank's latest 'Doing Business' report, India's place remained unchanged from last year's original ranking of 130 among the 190 economies that were assessed on various parameters. However, the last year's ranking has been now revised to 131 from which the country has improved its place by one spot.
The list of countries in the Doing Business 2017 is topped by New Zealand while Singapore is ranked second.
The report said protection of minority investors indicator measures the protection of shareholders against directors' misuse of corporate assets for personal gain and the rights and role of shareholders in corporate governance.
According to the report, India carried out an ambitious, multi-year overhaul of its Companies Act, bringing Indian firms in line with global standards, particularly in respect of accountability and corporate governance practices while ensuring businesses contribute more to shared prosperity through a quantified and legislated corporate social responsibility requirement.
Company regulation is an ongoing process. Since the enactment of the Companies Act, 2013, the corporate affairs ministry issued notifications on a regular basis to address ambiguities in the law. Most notably, two sets of amendments were released in August 2014 and May 2015, highlighting the government's ongoing commitment to reform.
Further, in June last year, it set up a committee tasked with identifying further amendments to the Act and centralising recommendations and concerns from private sector stakeholders and regulatory agencies.
"Despite this piecemeal introduction, it has paid off both in economic terms and in India's performance in Doing Business. India's score increased in 3 of 6 indices of the protecting minority investors indicator set," the report said.
To simplify administrative requirements, the minimum paid-in capital was abolished. To instil greater transparency, the Act increased disclosure requirements, particularly regarding related-party transactions.
To bring Indian firms in line with global standards, the Act added requirements to disclose managerial compensation and have one-third independent directors and at least one woman on the board. Besides, India became the first economy in the world with a quantified and legislated corporate social responsibility (CSR) requirement.
"The case of India serves as a reminder of the time it takes and the challenges inherent to a holistic legislative overhaul. Piecemeal fixes can be a time and cost-effective approach, but only a full-fledged legislative reform gives policymakers the opportunity to innovate and sends a strong signal to the business community," the report noted.
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