ease-of-doing-business-ranking

According to the latest World Bank Report on “Ease of Doing Business Index”, India ranks 130 and its position has gone up by just 1 spot as compared to the previous year. This report was made on the basis of a revised methodology adopted by the bank in which 10 basic parameters were taken into consideration for finding out how easily businesses can start in any country. 190 countries were included in the survey. According to the report, New Zealand takes the first position as the country which is comparatively better than all other countries in terms of ease of doing business taking into consideration all the 10 parameters.  Out of 10 parameters, India’s position has improved in four and in five parameters, India has worsened. But, nevertheless, the country is aiming for a jump of 80 spots next year to be among the world’s top 50 countries for ease of doing business. The World Bank officials had visited Delhi and Mumbai recently to gather more information and feedback from industries and the government.  The World Bank ranking is based on the average of scores for Delhi and Mumbai.

The Center made its first presentation before a World Bank officials and displayed how its processes, cost of construction, and time taken in approvals have improved significantly over the last few years.

Details of the report

  • India’s rank: 130
  • India’s scores: 36.88 marks on a scale of 100.
  • Top spots:  New Zealand, Australia and Taiwan.

Improvement is seen on three areas:

According to the latest edition of the Ease of Doing Business Index Report, improvement in Indian business is seen on the following three areas:

  •  Starting a business: India moved 9 spots in the criteria of starting a business from 164 to 155 this year.
  • Getting construction permits: This was one of the biggest problems in the previous year, for which the Government undertook serious measures and improved processes this year for granting construction permits sufficiently. India hopes to be at par with the current topper, New Zealand, in the next edition of the Doing Business report. Initially, Mumbai took 164 days and Delhi took 213 days to get a construction permit. The number of procedures required was as high as 42 and 29 in the two cities last year. But with the suggestion of the World Bank last year to shift online its construction permits system, at present, it takes only 60 days to get construction permits and the number of procedures has reduced to 8 online procedures.
  • Accessing electricity: The position moved up 29 spots to 70. Mumbai has the best electricity distribution utilities operating in the country. Obtaining a permanent electricity connection for a newly constructed warehouse is very essential for starting any business and the two cities Delhi and Mumbai taken in the report have significantly improved.

Problems

According to the same report, the two most serious problems faced by Indian businesses are:

  • Access to credit: Ranking has slipped from 36 to 42. It has become very difficult to get credit in India, though the government has taken many efforts for financial inclusion and pushing ease of credit delivery.
  • Ease of paying taxes: India’s position slipped one spot in the criteria of ease of paying taxes.

Other parameters

In other parameters like as registering property, trading across borders, protecting minority investors, enforcing contracts and resolving insolvency, India’s rankings remained the same as in last year. India position is 8 in the criteria of protecting minority interests of shareholders and this is the best ranking across all parameters.

 To sum up: We see both the pitfalls as well as the improvements in the report. However, the Government has asserted that many reforms that were undertaken the previous year were not included in the study. But the government is confident that if the current provisions and measures are included, India’s rank would considerably improve next year. In World Bank meeting, India seeks to be among the  top 50 position in doing business easily and enabling hassle-free and time-bound approvals for building and construction permits.