GST key reform for creating single market in India: World Bank

New Delhi: The proposed GST law is the most important reform towards creating a single market in India and if it is implemented by April 2016 then its impact will be visible by 2018, the World Bank said Wednesday.

"The GST (Goods and Services Tax) is the single most important tax reform because it is so important for creating one market in India. I continue to believe that the Indian government is committed to get the GST done, hopefully in the Winter Session (of Parliament).

"...GST will make it easier to pay tax. For example, if it gets introduced by April 2016... Realistically speaking you would only see the impact of GST by 2018 as per a survey based methodology," World Bank Country Director in India Onno Ruhl said today.

He said the GST is very important for the economy and it is a long-term measure. However, it is not the only thing that is going to improve the country's business ranking.

Ruhl was addressing the media on the occasion of the release of the "Doing Business 2016" ranking in India today.

As per the new ranking for doing business environment, World Bank has ranked India 130 out of 189 countries. It was ranked 142 in Doing Business 2015.

Ruhl said India's improved position in the ranking was attributed to many factors of which the new Companies Act and better electricity situation are significant.

He said the trend of decline has been successfully reversed by India.

"It is really a good news that on starting a business, on getting an electricity connection, e-filing to taxes, trading across borders, India has already taken actions since May 31," he said.

However, speaking about the challenges, he said India ranks worst when it comes to getting construction permits done and enforcing contracts.

"Getting construction permits and enforcing contracts (are the areas) where India is really very close to the very bottom," Ruhl added.

Among others, the India World Bank head also said that the agency is constantly engaged with the government and suggesting it in its preparation and action plan to improve the business environment.

Besides, he also stressed that the World Bank will in future will be engaged with the Department of Industrial Policy and Promotion (DIPP), industry bodies CII, FICCI to prepare the state rankings in future as well.

Ruhl also hoped the government to introduce the Bankruptcy Code in the upercentoming winter session of Parliament.

"Bankruptcy Code is very important, it is an important part of business environment. Our understanding is that the government intends...In the Winter Session. If adopted in the Winter Session it will definitely have a significant positive impact on the business ranking," he added.