The government is banking on gains from goods and services tax (GST) and higher recovery from bad debt that is now subject to insolvency resolution to move up the World Bank’s Ease of Doing Business rankings. Officials from the department for promotion of industry and internal trade (DPIIT) have made a detailed presentation to World Bank officials in Washington to argue India’s case and currently a team is visiting the country to assess the impact of the changes that have been highlighted by the government. The focus is on six of the 10 parameters where DPIIT believes significant improvement has taken place during the last 12 months. But steps have been initiated on all other aspects too, although results may not be fully visible yet as in the case with improvement in the functioning of commercial courts that will enable better enforcement of contracts, sources said.
There are areas, such as protection of minority shareholders’ rights, where India is already ranked seventh, and the government believes that it is on a strong footing. “But we cannot afford to be complacent as all the countries are trying to improve their processes and move up the rankings. So, there is a need for continuous reforms,” said an officer. For instance, South Africa slipped from a peak of 35 to 82, while Saudi Arabia is down from the 12th position seven years ago to 92 now. Government officials said maximum gains are expected to accrue on the paying taxes front where the impact of GST, which was rolled out in July 2017, was not fully factored in last time since the cut-off for assessment was December. Over the last 12-15 months, several steps, including lowering of rates and a simplified process for filing returns have been initiated, while the indirect tax regime has overcome teething issues. The government has argued that the return filing time has been reduced substantially, while the previous report suggested that there was an increase.