India Jumps 30 Places In Ease Of Doing Business, But Data Valid Only For Delhi, Mumbai

Views
2518

 

eodb_750

 

India has jumped 30 places to 100 among 190 countries in World Bank’s Ease of Doing Business report, driven by reforms in access to credit, power supplies and protection of minority investors. The report also ranked India among the top 10 improvers globally.

 

India was ranked 130 last year, one place above from 131 in 2015. It was ranked 142 in 2014, NDTV reported on October 31, 2017.

 

Prime Minister Narendra Modi termed the jump in rankings ‘historic’.

 

 

However, the rankings may not be a representation of the full picture as the Doing Business report considers only two cities per country, and in many cases, just one.

 

“Most indicator sets refer to a case scenario in the largest business city of each economy, “ according to Doing Business, a World Bank project which measures business regulations across 190 countries. In 11 countries with populations more than 100 million, Doing Business also collected data for the second largest business city.

 

Only Delhi and Mumbai were considered in India’s case. Maharashtra and Delhi account for 53% of India’s direct tax collections, IndiaSpend reported on May 3, 2016.

 

The rise in rankings has primarily been driven by three parameters: a) getting electricity, where India ranks 29; b) getting credit, where India is ranked 29; and c) protecting minority investors where India is ranked 4.

 

Though India has eased the process of starting a business by merging the applications for Permanent Account Number (PAN) and Tax Account Number (TAN) and improving the online application system, it still ranks 156 when it comes to starting a business, behind war-ravaged Iraq (154), Lebanon (143), Malawi (152) and Myanmar (154), according to the World Bank report .

 

How India Fares Across Different Parameters
Parameter 2016 Rank 2017 Rank
Starting a business 155 156
Dealing with construction permits 185 181
Getting electricity 26 29
Registering a property 138 154
Getting credit 44 29
Protecting minority investors 13 4
Paying taxes 172 119
Trading across borders 143 146
Enforcing contracts 172 164
Resolving insolvency 136 103
Overall ranking 130 100

Source: Doing Business In India 2018; Doing Business in India 2017
Note: The year mentioned in the table refers to release year of the report.

 

Experts and entrepreneurs expressed caution in taking these rankings at face value, FirstPost reported on November 1, 2017.

 

“When we incorporated Pocket Aces, it took us more than a month of hard work and running around for all the paperwork,” Aditi Shrivastava, co-founder, Pocket Aces–a digital entertainment startup–told FirstPost. “We would love to see this process brought down to less than a week if possible.”

 

Others highlighted challenges that must be addressed to ease business procedures in India like: 1) reducing time to incorporate companies; 2) improving parameters to enforce contracts; 3) easing complicated rules and regulations; 4) changing archaic rules on audit; and  5) making it simpler to shut firms.

 

(Saha is an MA Gender and Development graduate from the Institute of Development Studies, University of Sussex.)