In the recent months, India has improved its position in World Bank’s ranking of nations by Ease of Doing Business, from 130 to 100. This jump can be attributed to the changes brought in terms of ease of payment of taxes, access to credit and protection of minority investors. This improvement in rankings should not be a surprise since the government has taken many initiatives to make the business environment in India as transparent as possible, including but not limited to the “Make in India” campaign. All these efforts are aimed at making India more business friendly. When we consider the case of foreign investment, the investors pay attention to a multitude of factors ranging from market size, economic & political stability and exchange rates, to name a few. So if these basic elements are not present, even if the government provides a generous environment, investors are unlikely to respond. In India, the consumer market is showing a promising growth and this can be attributed to the growing purchasing power of average Indian consumer. Be it the automobile industry or the pharmaceuticals industry or the IT & ITES sector, India has one of the fastest growing markets.
According to the report by World Bank, India’s Distance to Frontier Ratio has also improved in 9 out of 10 categories. Even though India is among the top 30 nations in terms of providing electricity, giving credit and protecting minority investors, we still fall behind in areas like enforcing contracts and reducing the time delay in completing the procedures for incorporation of a business.