Indian Economy in 2018 : Ease of Doing Business & Beyond

December 31, 2018

As 2018 draws to a close, there are plenty of positive vibes emanating from the economic front as India cemented its position as the fastest growing major economy globally. Despite global vulnerabilities, India has stood out as a bright spot, showing great resilience and a steady rate of growth. Credit must go the Govt. for persisting with a bold reforms agenda and showing clear intent in addressing key investor concerns. Their efforts culminated in India improving its rank in the World Bank’s Ease of Doing Business Report for the 2nd year running – reaching an all-time high of 77 out of 190 nations – also featuring among the 10 most improved economies. This recognition comes on the back of several landmark reforms like simplification of the tax structure, amendment of the insolvency and bankruptcy rules, and initiatives to simplify cross border trade. Buoyed by this, the Govt. has now set a target of breaking into the top 50 and enter the 5 trillion dollar economy club – again ambitious but not beyond reach if we maintain the reforms trajectory. I’d urge the Govt. to prioritize the following to attract more investments and catalyse growth:

  • Widen the ambit of GST, rationalize corporate tax structure
  • Increase adoption of futuristic technologies – leverage the potential of AI, Blockchain, Big Data & Analytics to reduce human interface for faster TAT
  • Extend Ease of Doing Business parameters down to the district level to broaden the scope of reforms – introduce State and District rankings to induce health competition
  • Focus on single window clearance for starting new business; strengthen and digitize civil judiciary & set up commercial courts for faster contract enforcement; use technology to expedite property registration
  • With India headed for mid year General Elections, it is important that the new regime ensures policy consistency – and no retrograde steps- this is crucial for a favourable investment climate
  • Maintain fiscal discipline and ensure macroeconomic indicators such as interest rates and inflation stay within control