India Has Considerable Room to Improve Biz Scenario
Date: Sunday , April 01, 2012
An IMF Working Paper that there is a considerable room to improve the business environment in India and boost the corporate investments through measures like lowering of costs and better financial access. "Cutting various costs of doing business and improving financial access" can help in providing the boost to corporate investments and the country has considerable room to improve its business environment, it noted.
Last year, India was placed at the 132nd position among 183 countries in terms of ease of doing business. Even though the ranking was better than in 2010 (139th spot), it reflected relatively high costs of doing business. While monetary easing since the global financial crisis provided important support for corporate investment, the monetary tightening since early 2010 may have started hurting corporate investment at the margin.
”The main policy implication of these results is that lowering and stabilizing inflation is critical for sustained investment growth," the note added. Indian economy expanded just 6.1 percent in the 2011 December quarter, the slowest growth in more than two years, mainly on account of high interest rates and global demand slowdown. The Reserve Bank of India has hiked interest rates 13 times since March 2010 to October 2011 to tame inflation.