India Jumps 13 spots to record 63rd place in World Bank’s Ease of Doing Business. That’s some achievement by India say few and that’s just another gimmick by the Govt, nothing has changed say others.
Who’s right and who’s wrong? In my view, anybody who speaks or make statements without knowledge is IGNORANT. In this 21st century, we have complete access to every possible information. All we need is a little research and an intent to study the topic. That makes you an intelligent person and also sensible enough to comment on a particular topic.
Ease of Doing Business Ranking 2019 by World Bank
Today, we shall look at the process used in the scoring and ranking the countries. The Ease of Doing Business ranking is developed by top economists and has brought out more than 3000 academic papers. As many as 190 countries are studied and scored in this yearly report which had begun in the year Doing Business Report 2006. There are 10 categories which are separately ranked and each category is given a rank after comparing all the 190 countries and the score is given on 100.
We will now look at each of the 10 categories and see how India is doing in each:
• Starting a Business: This topic measures the process, cost, time and minimum capital required to start a company. India has a score of 81.6 but not enough to beat other countries. India’s rank here stands at 136. A lot to improve, long way to go.
• Dealing with construction permits: Much important is the construction permits as it deals with the local bodies like GHMC, BMC etc; the procedures, time and cost to complete formalities, the safety regulations in place are considered. India scores 78.7 but outpowers many other countries to be ranked at 27th. So, we are way ahead of many countries in giving construction permits. Good news.
• Getting electricity: Apart from the procedure, time and cost took to get the connection to the electrical grid, this parameter also studies the reliable power supply and tariffs. India with a score of 89.4 is ranked at 22nd, which is also a great thing. This ranking has improved especially in the last 5 years.
• Registering property: India has always had issues with Land dealings. Politics and powerful people intervention has put ourselves in worst condition for this parameter. India scores 47.6 here and is ranked at 154th. We seriously need to work on this.
• Getting credit: Credit is the biggest ticket for any new entrant into Business. Every Start-up needs money and economics of the country support the Businesses borrowing at a lower interest rate and proper regulation. India with a score of 80 is ranked at 25th in this parameter. So, unlike many people’s belief that it is tough to get loans, India is one of the easiest countries when it comes to loans.
• Protecting minority investors: After credit, comes the safety and security of the shareholders. Especially the Minority shareholders rights and corporate governance are crucial in an economy. Our regulations and bodies that govern the sectors have played a major role in this. India has scored 80 again and is ranked 13th, the best in any category. So, small investors have enough protection.
• Paying taxes: Though India has recently reduced the Corporate Taxes, the other issue is the payment services and the procedure. India is lagging badly here with a score of 67.6 and ranked at 115th. Tax evasion is a loss to Govt as well as credibility. India needs to work on this.
• Trading across borders: Undoubtedly most of the businesses deal in trading of products across borders both local and international. If we look at the import and export-related regulations, India has scored 82.5 but is still ranked at 68th.
• Enforcing contracts: This parameter studies the legality and its power in the Country. The procedure for filing the cases, applying for contracts and time taken for justice to be established. India has a score of 41.2 which is the lowest in all parameters and is ranked at 163th.
• Resolving insolvency: This parameter studies the process and the regulations laid out to bring out the companies from insolvency also studies the recovery rate of insolvent companies. India has been improving in this category after many decisions by RBI and Govt of India. India scored 62 in this parameter and is placed at 52nd rank.
Overall taking a simple average for all the factors, India has scored 71 out of 100 and is placed at 63rd rank. India has been improving year by year on various parameters which is why India has moved up from 142nd to 63rd rank in just 5 years. Yes, this is our record best rank but still, India has lots of potential and things to correct.
The day isn’t far when India will be seen in the top 30 list of Ease of Doing Business Ranking. For which Indian govt must work on the issues like Contracts and the property dealing rules. Once the two parameters are taken care India will jump more in ranking.