India's Leap to the Top: How the Business Environment Improved in Just a Few Years

The story of India's drastic improvement in the global ranking of 'Ease of Doing Business' is one of remarkable progress. From 130th to 100th in just a few years, India has not only met but surpassed many expectations. This transformative change is a testament to the resilience and determination of the nation's policymakers and business communities. Let us explore the positive changes and the key reforms that have led to this significant leap.

Positive Changes and Key Reforms

While the journey has been fraught with challenges, it is essential to highlight the positive developments. These have played a crucial role in propelling India to a better position in the global rankings. The improvements can be attributed to several big positives and strategic reforms.

1. Tax Reforms with the Implementation of GST

The introduction of the Goods and Services Tax (GST) on July 1, 2017, was a landmark reform in the Indian economy. Previously, the complex, fragmented nature of the tax system created inefficiencies and administrative challenges. The GST unified all goods and services under one tax umbrella, simplifying compliance and reducing tax evasion. This harmonization has significantly streamlined the tax ecosystem, benefiting businesses and consumers alike.

2. Legal Reforms: Bankruptcy Law and Protection of Minority Interests

The new Insolvency and Bankruptcy Code (IBC) in 2016 introduced reforms to address the legal complexities that plagued the business environment. This law provides a faster and more efficient resolution process for insolvent businesses, paving the way for quicker recovery and investment. Additionally, the protection of minority interests, particularly in corporate governance, has been strengthened, ensuring that all stakeholders' rights are upheld. These changes have not only enhanced the legal framework but also fostered a more equitable and transparent business ecosystem.

3. Continuous Implementation and New Reforms

The implementation of these reforms has been ongoing, and more recently, the government has introduced additional measures to further improve the business environment. Policies such as easier access to credit, simplified procedures for foreign direct investment (FDI), and ongoing digital transformation initiatives have all contributed to this significant leap. The focus on improving e-governance and digital platforms has also facilitated smoother business operations and reduced bureaucratic hurdles.

Implications and Future Prospects

While the jump in the ranking is a significant achievement, it also highlights the potential for further improvement. The government continues to work on enhancing various aspects of the business environment, including infrastructure, ease of starting a business, and contract enforcement. These areas still need improvement, and the government is committed to addressing these challenges to maintain a competitive edge.

Conclusion

The journey from 130th to 100th in the 'Ease of Doing Business' rankings is a testament to the potential of sustained reforms and consistent economic policies. India's success in these reforms demonstrates the importance of a holistic approach to economic development, combining tax and legal reforms with continuous improvement initiatives. As India continues to evolve, the business environment is likely to become even more favorable, attracting more investments and fostering a more robust and prosperous economy.

By staying focused on these key areas, India can maintain its upward trajectory and continue to attract business and investments, securing its position as a leading global economy.

Keywords: ease of doing business, tax reforms, legal reforms