Amid opposition parties crying for note ban issues and the Rafale controversy Prime Minister Naredra Modi has succeed in lifting India in the global ranks, which is undoubtedly remarkable.
According to Forbes’ last week’s report, Indian economy jumped 23 spots in World Bank’s 2018 Ease of Doing Business ranking.
India occupies the 77th position, which was at 100th in 2017 and that comes on the top of another jump of 30 spots in the 2017 ranking from the previous year.
The progress sets India apart from its neighboring countries in the region like Pakistan and Bangladesh, which ranked 136 and 176 respectively.
The Ease of Doing Business actually focuses on the impact of government regulations on starting and operating a business, such as the number of steps that are required to launch or to shut down a business, to deal with construction permits or to obtain electricity.
Meanwhile, according to the World Economic Forum Report’s competitiveness report, the Indian economy has been marked in another global ranking, which shows the progressive economy status of the country. That report ranked India 40th out of 137 countries, including the highest rank it has ever been marked, up from 71st three years ago.
Now the question comes, what works behind India’s enormous achievement in the Ease of Doing Business ranking?
According to Vijay GovindarajanCoxe who is Distinguished Professor at the Tuck School of Business at Dartmouth, there are three factors.
First, the BJP took power from the Congress party four years ago and their main agenda is ‘economic growth’, where as Congress was all about populism. The perception of India changed. Second and the most important part is the Modi government relaxed rules and regulations and made it easier to do business. Third, as the present scenario, China and US have two formidable rival blocs, India took it as an advantage. It has emerged as the largest economy for the foreign companies seeking growth.
Meanwhile, LIU professor Udayan Roy has got skeptical about India’s frantic rise in global rankings. ‘Frankly, I am stunned!’ Roy stated, adding “I have no idea what actual policy changes or improvements in implementation of excising policies which has led to this huge improvement. I hope, India can at least maintain the rank in the years ahead. And, we will have to see if this translates into higher foreign investment. That’s what India needs”, said Udayan Roy.
Furthermore he stated, foreign investors have taken notice. India recorded a capital and financial account surplus of 17.43 USD Million in the second quarter of 2018, according to Tradingeconomic.com report. That’s well above the average of 8.13 USD Million for the period 2010-2018 and that is also a big factor behind the rally in Indian equities.
Improvement in the Ease of Doing Business, the rise in competiveness and the foreign capital flows have all helped India among the world’s fourth fastest growing economics.
Interestingly, there’s another report which predicts that India’s economical growth will keep going ahead in the next year too. The IMF World Economic Outlook recently published a report, in which it claims that India’s economy will grow at 7.3% in 2018 and 7.4% in 2019, up from 6.7% in 2017 ahead of China’s economy growth.
However, the economists believe that still, India’s rise in the world economy has yet to touch the masses.
According to last month’s Gallup survey, the report found that Indians’ rating of their current lives nationwide are the worst in recent record, an average of 4.0 on a 0-to-10 scale in 2017, down from 4.4 back in 2014.
And there are few old villains that can eventually stop India’s growth in global rankings, like the persistence of corruption, the rise of non-performing loans, in the state owned banks and the fluid taxation system.