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IMF recommends improving domestic business environment to stimulate investment

09 Mar 2012 Evaluate

As per a new paper published by the International Monetary Fund (IMF) there is considerable room for improving the business environment in India. The paper observes that cost of doing business in India is high given the terms of financial access and the state of infrastructure. Attempts towards improving these could boost the business environment of the country.

The paper has noted that corporate investments have slumped to 10% of the national economy from 14% prior, due to the global financial crisis. Though this can be largely explained by the global economic scenario, it does not fully account for the recent weak performance of the corporate sector. Hence an improvement in the domestic environment by way of controlling inflation, improving financial access by reforming regulation and bettering institutions along with developing infrastructure can stimulate business investment.

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 as per Kiichi Tokuoka, the author of the paper.


 

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