New Delhi: India needs to improve its ranking on World Bank’s ease of doing business report, said the Economic Survey 2013-14. The doing business report 2014 prepared by the World Bank shows that India ranks 134 out of 189 countries in 2014.
“There has been increasing concerns about the difficulties faced by firms operating in India. In a purely economic sense it is easy to explain the actions of a government that restricts firms in certain ways in order to address market failures,” said the Economic Survey tabled in the Parliament on Wednesday.
However, it said that the Indian landscape features numerous government interventions that are not connected to market failures. “Therefore, there is immediate need to simplify processes including those relating to tax policy and administration,” said the survey.
It pointed out that global firms have a choice about where to invest, which is based on the ease of doing business there. In much the same way, many large Indian firms undertake foreign direct investment (FDI) outside the country and choose where they wish to invest.
In an examination of 3,102 large firms in India, 373 of these have done outbound foreign direct investment that is above 1 per cent of their total assets, said the Economic Survey. The firms that have done outbound FDI account for 15.8 per cent of the total assets of the 3,102 firms.
Although, India has raised concerns about the methodology used in the compilation of the World Bank’s Doing Business Report, a sustained programme of reform is required on most aspects of the interface between firms and the state, said the Survey. “The immediate objective must be to match the average value of emerging markets (EMs) on the ‘Doing Business’ score,” it added.
16 new NIMZs
The Centre has announced setting up of 16 national investment and manufacturing zones (NIMZs) to boost growth Under the National Manufacturing Policy. The policy aims at enhancing the share of manufacturing in GDP to 25 per cent in a decade and creating 100 million jobs.
64% more workers
The proportion of working-age population in India is likely to increase from around 58 per cent in 2001 to more than 64 per cent by 2021, with a large number of young persons in the 20-35 age group, according to the pre-Budget Economic Survey 2013-14. The average age of the 125 billion -strong Indian population will be 29 years in 2020.
Build re-stabilisation
Attributing the rupee fall in 2013 to frictional forces and speculations in the forex market, the Economic Survey said the currency has stabilised, reflecting overall sense of confidence and the Centre should build on this optimism to improve investment flows. The rupee, which is trading around 59.9 to a US dollar, has stabilised, reflecting a sense of confidence in forex.
