Ease of doing Business: India’s stature

World Bank is regarded as one of the most significant multi-lateral agency that aims to eradicate poverty and promote shared prosperity in a sustainable way. Every year the organisation produces its ‘Ease of Doing Business’ report that ranks 190 economies on ten parameters. The report was first introduced in 2003 and the index was introduced my Simeon Djankov, an economist at Central and Eastern European sector of the World Bank. The 10 parameters have been decided which shows relevant characteristics necessary in setting up a business irrespective of nations. In 2019, the ten parameters were: Starting a business, dealing with construction permits, getting electricity, registering property, protecting minority investors, paying taxes, getting credit, trading across borders, enforcing contracts and resolving insolvency. However, in the past index two more parameters: employing workers and contracting with the government were added which did not affect the final score or ranking. In this blog I would like to highlight how India has performed in setting up business over the ‘Modi years’.  

According to the report, New Zealand retained its 1st position while Somalia was ranked at 190th spot. India stood at 63rd position in 2019 marking an improvement of 14 places from its 77th position in 2018. India’s score improved from 67.23 (2018) year to 71.0 this year. India for the third consecutive year was present in the list of 10 economies where the business climate has shown significant improvement. India improved or retained its rank on 6 parameters out of 10. The essential features which contributed in achieving this feat have been: 

  • Starting a Business- Starting a business became easier by fully integrating multiple application forms into a general incorporation form.
  • Dealing with Construction Permits- For example, building a warehouse amount around 4% of the warehouse value as compared to 5.7% in the previous year.
  • Trading across Borders- A single electronic platform has been introduced which improved electronic submission methods for documents and up-gradation of port infrastructure, import and export process.
  • Resolving Insolvency- Recovery rate under resolving insolvency has improved significantly from 26.5% to 71.6%. Also, the time taken for resolving insolvency has also come down significantly from 4.3 years to 1.6 years. Thanks to insolvency and bankruptcy code of 2016 and with 2019 amendment it is expected to perform better. The parameter is the major improvement area with India’s rank of 108 in 2018 to 52 in 2019.

India continues to maintain its 1st position among South Asian countries which was 6th in 2014. The World Bank will now include Kolkata and Bengaluru, besides Delhi and Mumbai, for preparing ease of doing business report, in order to provide a holistic picture of the business environment of the country. In my opinion, the various initiatives that present government has taken over the years have worked well and India’s stature has improved by going through the statistics. 

Shalini Singh

PGDM  Batch 2019-2021