India needs more reforms to be competitive, World Bank head says

New Delhi: India can take more steps to be competitive in the global market, such as enforcing contracts, World Bank President David Malpass said.

“There can be more progress in land permits and in enforcement of contracts,” Malpass said at a press conference in New Delhi on Saturday. “Other countries in Asia have done pretty well.”

India jumped 14 places to 63rd in the World Bank’s annual rankings for ease of doing business released Thursday, helped by a new insolvency law. That’s a shot in the arm for Prime Minister Narendra Modi, who’s inviting global investors to manufacture in India and help boost domestic growth from a six-year low.

Malpass, who met Modi during the day, also said India can deepen its corporate bond market. A corporate tax cut should add to more growth, he said. While Modi has overhauled areas like taxation and banking over the past few years, the country still lags in enforcing contracts and registering property, according to the World Bank. Modi aims to make India a $5 trillion economy by 2025, from $2.7 trillion now.

The multilateral lender in October cut India’s economic growth forecast by the most among South Asian nations, mainly because of a deceleration in domestic demand. India has been competing with Asian peers such as Vietnam, Thailand and Malaysia to get investments from global manufacturing countries which are shifting away from China due to tariff wars. While India comes closest to China in terms of size, it has a weak infrastructure and red tape slows down approvals.