India stands out this year as one of the 10 economies that improved the most in the areas measured by Doing Business. India is the only country in South Asia and BRICS economies to feature among most improved economies of the DB Report this year.

For a country that aspires to create over 12 million jobs annually, achieve 25% contribution to GDP through manufacturing and emerge as an export hub; remaining competitive is an absolute necessity. Asia is rapidly emerging as a hub for manufacturing by attracting leading manufacturing firms in a diverse set of sectors right from Automobile to Electronics to Textiles. As per the World Investment Report 2017; China remains the most attractive FDI destination in Asia, followed by India, Thailand, and Vietnam. One of the common features amongst these countries is that they are all competing on FDI for a labor-intensive sector and trying to attract certain parts of the value chain of high-technology sectors.

India will need to remain ahead of its competition in Asia to remain attractive to investors. As per the DB2018 report, these countries stack in the following way in terms of EoDB ranking across key parameters

Source: DB 2018, World Bank Report

Among the above nations, India is ahead on indicators like Getting credit, Protecting minority interest and also ranks second highest in the Getting Electricity indicator.

In this year’s reform exercise, India inculcated various reform measures whose impact was felt by the business community. Be it streamlining the business incorporation process by introducing the SPICe form (INC-32), which combined the application for the Permanent Account Number (PAN) and the Tax Account Number (TAN) into a single submission or improvements to the online system for Employee’s Provident Fund Organization (EPFO) and the Employee’s State Insurance Corporation (ESIC) which decreased the time needed to complete the applications has helped in the starting business parameter.

India also strengthened access to credit by adopting a new insolvency and bankruptcy code that introduced a reorganization procedure for corporate debtors. Increased coverage of security interest registration under SARFAESI Act has also helped in the improvement of the Getting Credit rank from 44 to 29. Other reform measures like introducing the Income Computation and Disclosure Standards (ICDS) to standardize the methods of computing taxable income and other tax accounting standards has simplified tax compliance which has led to an improvement in the Paying taxes indicator. Goods and Service Tax (GST), enforced on July 1, 2017 though recognized as a massive action point was not considered in this year’s reform exercise but the impact will be seen in the next year exercise.

Inspite of all the work done, India still needs to work on the indicators like Enforcing contracts and Registering property where other competing countries like China, Thailand rank higher. China has achieved a higher quality of judicial process by introducing electronic filing systems for commercial cases and allowing attorneys to submit the initial summons online which has improved its Enforcing contracts indicator.

With its 26th ranking, Thailand has risen into the top 15% of countries globally in the ease of doing business. The country has eliminated the requirement for companies to obtain a company seal and repealed the requirement to obtain approval of the company’s work regulations from the Labor Department. The impact has been an astounding improvement in the ‘Starting a business’ indicator where Thailand now only takes 4.5 days as against the earlier time of 27.5 days. Thailand also strengthened its land administration system by implementing a geographic information system and for a tax audit executed a new automatic risk-based system for selecting companies in 2016.

Such progressive measures and reform actions of competing nations exemplify ease in doing business and give much-needed impetus to India for improving its processes. Additionally, in the current year evaluation exercise, almost 200 reforms across all indicators could not get garner adequate stakeholder feedback. The way forward strategy for India will be to continue to work with the departments, nodal departments, state governments to make sure that these reforms are implemented on the ground and are felt by the stakeholders.

India, today is triumphant with scoring a century at the Doing Business 2018 rankings and with good reason. The road ahead looks challenging yet promising and with the right thrust coming from the current government with ‘Reform, Perform and Transform’ as the PM’s mantra, the country is hopeful to achieve a better ranking in the World Bank reform exercise next year and consequently attracting higher interest and investment from businesses globally.