Responding to Prime Minister Narendra Modi's request to World Bank president Jim Yong Kim, a team of World Bank Group experts is currently in India to suggest key reforms and support India’s efforts to improve its business environment.
Mr. Modi is particularly concerned about India's ‘Doing Business’ ranking that is currently at an abysmally low 142 among 189 countries ranked, down from 140 last year. Improving India’s ranking is essential to the success of the Prime Minister’s pet project ‘Make in India’ and improving investor sentiment in India.
The team, comprising experts from the World Bank Group’s Trade & Competitiveness Practice, will suggest changes in commercial legislation — at local, state and national levels — so that the government can undertake reform. “The team is now in India to meet with public and private sector stakeholders in Delhi and Mumbai to learn about ongoing reform initiatives, discuss potential reform options and the feasibility of their implementation,” Sylvia Solf, Global Product Lead of Indicator-based Reform Advisory of the World Bank Group’s Trade & Competitiveness Practice told The Hindu. “The team will present a set of recommendations to the Government of India,” she added.
WB team to suggest ‘business friendly’ regulatory framework
Prime Minister Narendra Modi had specifically requested the World Bank during his meeting with president Jim Yong Kim earlier this year that a Bank team visit India and suggest reforms in the Doing Business indicators. India ranks 142 out of 189 countries in the World Bank’s Doing Business indicators and Mr. Modi is keen to improve India’s rankings and encourage investment for his ‘Make in India’ project.
Indicators related to laws, especially “Enforcing Contracts” and “Resolving Insolvency” are among the areas the team of experts now in India is focussing on.
Government representatives have told the WB that resolving insolvency provides ‘a window of opportunity to address changes to commercial legislation.’ Deliberations have so far examined the scope for reform of the insolvency-related provisions of the Companies Act, 2013, including the establishment of a regulated insolvency practitioner, the source added.
Apart from this, the team is trying to identifying key bottlenecks in the resolution of commercial cases with special focus on relatively small claims in local Civil Courts in Mumbai and Delhi. “At this point it is too early to share particular findings since the work is still ongoing,” Ms. Solf, Global Product Lead of Indicator-based Reform Advisory of the World Bank Group’s Trade & Competitiveness Practice, said.
“Since 2007, the World Bank Group has worked with more than 70 countries to assist reform programmes aimed at improving the regulatory environment for businesses in areas covered by the Doing Business project, such as business registration, construction permitting or insolvency reforms,” she added.
“The focus of the work is to support the implementation of a more business-friendly regulatory environment for domestic companies, primarily small to medium-sized firms, that encourages formal entrepreneurship in the country,” Ms. Solf explained.
The Union Cabinet had on Tuesday cleared 14 amendments to the Companies Act 2013, two of them specific to the Doing Business parameters.
“Rather than dollars, we are more interested in the knowledge and expertise of World Bank,” Mr. Modi had tweeted on July 23 after his meeting with the WB chief. He wants India’s ranking, to start improving by March 2015.