India climbed 12 spots, going up from 142 to rank 130 among a list of 189 countries in World Bank's ease of doing business report, on the back of a fast-paced reform process initiated by the government of Prime Minister Narendra Modi.
World Bank on Tuesday released its annual report Doing Business 2016: Measuring Regulatory Quality and Efficiency, which is topped by Singapore, followed by New Zealand, Denmark, South Korea, Hong Kong, Britain and the US.
"A forward movement of 12 spots in the ease of doing business by an economy of the size of India is a 'remarkable achievement," World Bank's chief economist and senior vice president Kaushik Basu said.
India, however, is far below China in the ease of doing business ranking. China is ranked 84, far above India while Pakistan is placed at 138th.
The World Bank noted that like several other developing countries, India also implemented some much needed reforms during the past year.
For example, in starting a business, India eliminated the requirements for a paid-in minimum capital and a certificate to commence business operations, significantly streamlining the process for starting a business.
"What is significant about India is that they are in the middle of what appears to be a very, very ambitious process of reforms affecting a broad range of areas captured by the Doing Business indicators," Augusto Lopez Claros, director of the Global Indicators Group of the World Bank, said during a conference call.
"My expectation, therefore, is that if this process continues, if it is sustained, and the authorities show the degree of determination which has been in evidence in the last year, then we could see substantial improvements in coming year," he said.
Observing that the potential to see kind of a rapid economic growth in India is very high, Claros said it has very favourable demographics, and to the extent that some of the bottlenecks that the Doing Business data identified in India are removed, the potential benefits could be quite large.
"And India being India, that is a large economy. This could have also international repercussions in terms of the impact on the global economy," he said.
Claros said there is a great deal of work underway in India to design a policy that will be modest and friendly.
"And the improvement that you have seen in India's Doing Business ranking this year is kind of an early recognition of these efforts, but more is coming," he added.
Developing economies quickened the pace of their business reforms during the last 12 months to make it easier for local businesses to start and operate, says the World Bank Group's annual ease of doing business measurement.
The report, Doing Business 2016: Measuring Regulatory Quality and Efficiency finds that 85 developing economies implemented 169 business reforms during the past year, compared with 154 reforms the previous year.
High-income economies carried out an additional 62 reforms, bringing the total for the past year to 231 reforms in 122 economies around the world.
A total of 45 economies, 33 of which were developing economies, undertook reforms to make it easier for entrepreneurs to start a business.
''India, for example, made significant improvements by eliminating the minimum capital requirement and a business operations certificate, saving entrepreneurs an unnecessary procedure and five days' wait time. Kenya also made business incorporation easier by simplifying pre-registration procedures, reducing the time to incorporate by four days.''
Efforts to strengthen legal institutions and frameworks were less common, with 66 reforms implemented in 53 economies during the past year.
The largest number of such reforms were carried out in the area of Getting Credit, with 32 improvements, of which nearly half were undertaken in Sub-Saharan Africa.