India business climate to see slow reform not big bang
Tuesday, June 9, 2015
Subject
India's business climate.
Significance
Prime Minister Narendra Modi's ambitions to put India at the centre of global manufacturing have been dented by publication of the World Bank's 2015 'Doing Business' report, which ranks India 142nd among 189 countries. In at least four categories, India performed poorly, its overall position having deteriorated steadily since the rankings were introduced in 2006. The report's methodology is controversial and is likely to be changed. Nonetheless, Modi has responded by pledging to bring India into the top 50 within two years.
Impacts
- Supreme Court intervention on such matters as land and environment remains a major uncertainty for businesses.
- Few foreign firms are likely to be taxed retroactively, but they may have to fight a costly and protracted judicial battle on the issue.
- State-level business environments are controlled largely by regional authorities, casting a cloud over Modi's optimistic pronouncements.
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